Takaychi: to form strategy on Japan as asset-management nation

In the wake of Prime Minister Sanae Takaichi’s decisive electoral victory in February 2026, Japan is advancing a strategic vision to position itself as a leading asset-management hub. The government has outlined a comprehensive economic strategy that includes fiscal stimulus across 17 strategic sectors, such as artificial intelligence, semiconductors, and biotechnology, to strengthen domestic supply chains and attract global capital. These efforts align with enhance Japan’s financial markets, as highlighted in recent government statements.

A key component of this strategy involves the implementation of the Employment for Skill Development (ESD) system, which replaces the controversial Technical Intern Training Program (TITP). The ESD aims to provide a sustainable pathway for foreign workers to acquire skills and transition to long-term employment in Japan. However, the system is expected to cap foreign labor inflows at approximately 1.23 million by the end of fiscal 2028, which may pose challenges for sectors facing acute labor shortages.

Simultaneously, the government is accelerating AI adoption across industries to offset demographic pressures and improve productivity. While AI deployment is seen as a potential solution to labor shortages, it also raises concerns about workforce displacement and the need for reskilling programs. The Takaichi administration has emphasized the importance of balancing technological advancement with labor market stability, particularly in the context of an aging population and rising living costs.

These developments reflect a broader shift in Japan’s economic policy, with a focus on long-term structural reforms and strategic investments. As the government moves forward with its agenda, the success of these initiatives will depend on their ability to address both economic and social challenges while maintaining investor confidence in Japan’s financial markets.