Katayama: to keep fiscal sustainability in mind on investments
Finance Minister Satsuki Katayama has emphasized the importance of maintaining fiscal sustainability while pursuing strategic investments to strengthen Japan’s economy in 2026. Speaking ahead of key fiscal reforms, Katayama outlined balancing growth-oriented initiatives with responsible public finance management.
Japan’s economy has shown signs of recovery, with nominal GDP approaching ¥700 trillion and consecutive wage increases exceeding 5%. However, Katayama noted that potential growth remains constrained, as wage growth hasn't kept pace with rising prices, particularly for essential goods like food. To address these challenges, the government has implemented comprehensive economic measures aimed at fostering a virtuous cycle of rising incomes, improved consumer sentiment, and stronger business profits.
A key focus for 2026 is the promotion of bold, strategic investments designed to enhance economic resilience and supply-side capacity. These efforts include public-private partnerships in critical sectors that support economic security and advanced industry growth. The government is also working to integrate these initiatives into the fiscal 2026 budget and tax reforms, ensuring alignment with long-term fiscal goals.
Katayama highlighted that Japan’s fiscal outlook is improving, with the debt-to-GDP ratio projected to decline steadily and primary balance's most significant improvement since 2001. The government remains committed to transforming fiscal structures to ensure sustainability while fulfilling obligations to both current and future generations.
To mobilize financial resources, the government has expanded the NISA tax-exemption system, encouraging broader participation in productive investments. With 27 million NISA accounts, the program has broadened the investment base, particularly among younger demographics. The government plans to further enhance NISA by extending eligibility to those under 18 and expanding the range of investment products.
In addition, Katayama emphasized the importance of global engagement, noting that Japan will continue to collaborate with international partners to address global economic challenges, including supply chain resilience and debt sustainability in developing countries. Through initiatives like Japan Weeks, the government aims to strengthen dialogue with global investors and enhance Japan’s appeal as a destination for long-term capital.
