The Japanese government committed to substantial investment in shipbuilding as part of its stimulus strategy, with Prime Minister Sanae Takaichi seeking to bolster the economy through expenditures from both public and private sectors.
At a gathering of its growth strategy task force, the government unveiled a plan to boost trial production of rare earths in the waters adjacent to Japan's easternmost Minamitori Island.
The event unfolds as China, possessing a significant portion of the strategically essential materials, tightens export limitations on these resources.
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Aligned with Japan's growth strategy plans, which will be included in an economic package by month’s end, the government aims to create tax incentives to encourage private sector capital investment.
Takaichi aims for strong economic growth through substantial investments that can enhance resilience to potential crises and has pinpointed 17 key sectors, including shipbuilding, artificial intelligence, and semiconductors.
The prime minister, who took office last month, assigned each of the 17 sectors to relevant ministers and instructed them to develop road maps detailing specific investment strategies, aiming to finalize the plan by next summer.
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The shipbuilding industry is a field where Takaichi and US President Donald Trump reached a consensus to improve cooperation during their meeting last month.
Takaichi, an advocate of what she calls "responsible and proactive" fiscal expansion, has announced that her administration will back the economic initiatives with a supplementary budget for the ongoing fiscal year concluding in March.
With rising living costs for families, the stimulus measures are expected to feature increased subsidies for municipal authorities to ease the financial strain on citizens, as well as support for utility expenses during the winter, sources knowledgeable about the matter revealed.
Takaichi has appointed various advocates for fiscal spending to boost growth as part of the growth strategy task force, such as Takuji Aida, the head economist at Credit Agricole Securities Tokyo, and Goshi Kataoka, a previous member of the Bank of Japan's Policy Board.
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In a similar move, Masazumi Wakatabe, the ex-BOJ Deputy Governor, and Toshihiro Nagahama, head economist at the Dai-ichi Life Research Institute, were added as newly appointed private-sector members of the Council on Economic and Fiscal Policy. They are perceived as supporting her economic strategy.