Japan Plans Public-Private Scheme to Boost Strategic Investment

The Government of Japan is considering a new financing scheme designed to accelerate corporate investment in strategic growth sectors by channeling public funds through private commercial banks. The Ministry of Economy, Trade and Industry is currently studying an expansion of a framework that would enable the government-backed Japan Finance Corp to provide funds to private lenders, who would then extend those loans to companies pursuing large-scale acquisitions and investments.

To encourage participation and reduce credit risk for private lenders, the government proposes providing partial loss guarantees on qualifying loans. This initiative is a component of Prime Minister Sanae Takaichi’s broader growth strategy, which aims to mobilize more than 370 trillion yen ($2.4 trillion) in combined public and private investment by fiscal 2040.

The strategy specifically targets 17 priority sectors, with a primary focus on artificial intelligence and semiconductors to ensure long-term economic competitiveness.