(March 10): Japan identified dozens of products and technologies as priority targets for investment, advancing Prime Minister Sanae Takaichi’s flagship economic strategy to channel public and private capital into 17 strategic sectors.
The government selected 61 items for support, according to materials released after a growth strategy panel meeting on Tuesday. The list includes 27 technologies already under early stage review, such as physical artificial intelligence (AI) systems, regenerative medicine, quantum computing and marine drones.
The selection reflects economic security considerations and export potential, the document indicated. Officials plan to present spending estimates and timelines for each item by summer as a part of an investment road map.
“In addition to the leading products and technologies presented today, let’s move forward with drafting public-private investment road maps for others as well, with a strong sense of urgency,” Takaichi said to ministers at the end of the meeting.
The investment plan is a pillar of Takaichi’s economic strategy aimed at boosting the nation’s growth potential by offering public support to cutting-edge industries. While figures earlier in the day showed stronger-than-expected capital spending by businesses in the last quarter of 2025, the prime minister has repeatedly bemoaned the low level of long-term investment in growth areas.
Takaichi’s government last year identified 17 sectors as priorities for public private funding, including shipbuilding, defence and critical minerals. After emerging from last month’s election with an unprecedented landslide triumph, Takaichi pledged to compile a comprehensive package for these strategic areas. Steps are expected to include incentives for corporate spending, support for overseas expansion and regulatory changes, though few details have been disclosed.
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During Tuesday’s discussion, the government said Japan aims to capture more than 30% of the global AI robotics market by 2040. It is also considering a target to raise sales of domestically produced semiconductors to ¥40 trillion (US$254 billion or $321.32 billion) by that year.
Takaichi’s push for large scale investment has buoyed investor sentiment, helping lift Japanese equities. The Nikkei 225 briefly broke through the 59,000 mark earlier this year, supported in part by companies tied to the 17 priority sectors. That was before tensions in the Middle East triggered a pullback this week.
Identifying specific products could further improve prospects for firms operating in these fields. Fanuc Corp, Yaskawa Electric Corp and Mitsubishi Electric Corp seek to inject AI into their factory robots and industrial automation systems, while Sony Group Corp. produces sensors that are used in robotic systems.
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Chipmakers Rohm Co, Kioxia Corp and Renesas Electronics Corp may benefit from ramped up investment in semiconductors, along with companies making related tools and materials such as Sumco Corp, Fujifilm Holdings Corp and Kyocera Corp.
The government said it will estimate the economic impact of the investments and incorporate the results into its mid- to long-term economic forecast due this summer.
Still, uncertainty persists over how the program will be financed, which could become a source of market concern. Japan’s fiscal space is expected to narrow further as spending pressures rise from social security, defence and ballooning debt servicing costs.
“We need to carefully examine the fiscal scale that is feasible while steadily reducing the ratio of government debt to gross domestic product,” Takaichi said to Finance Minister Satsuki Katayama.
Still, questions also remain about the broad range of sectors selected.
“It actually feels like there isn’t much concentration going on,” said Hideo Kumano, an executive economist at Dai Ichi Life Research Institute. “To justify spending massive amounts of money, the growth strategy has become somewhat unfocused, with the target areas spread across too many areas.”
Kumano also said that Japan’s most immediate challenge is now energy security, an area not directly addressed within the 17 sectors.
“The Takaichi administration presents itself as prioritising crisis management investment,” Kumano said, “Yet at a time when crisis management is genuinely required, its policies are doing little to address energy policy.”
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