Key facts
- Japan's Ministry of Economy, Trade and Industry (METI) requested 7.8 trillion yen for the fiscal year starting April 2027.
- The budget aims to accelerate investment in semiconductors, artificial intelligence, and robots, with 2 trillion yen allocated.
- Securing critical minerals, including rare earths, is allocated 680 billion yen.
- Enhancing defence and dual-use capabilities will receive 180 billion yen.
- The request reflects a new budget process allowing proposals without spending ceilings.
- The total requested amount exceeds the combined allocation for METI in the current fiscal year's initial and supplementary budgets.
Japan's Ministry of Economy, Trade and Industry (METI) is seeking an unprecedented 7.8 trillion yen ($49 billion) for the fiscal year beginning April 2027, aiming to boost investment in strategic sectors like semiconductors and artificial intelligence. This substantial request aligns with Prime Minister Sanae Takaichi's broader agenda to revitalize the Japanese economy through significant public and private investment over the next 14 years.
The budget proposal reflects a shift in Japan's budgeting process, allowing ministries to submit proposals without pre-set spending limits in a single round, a move intended to reduce reliance on supplementary budgets. Yuko Tamai, a METI official, stated that the ministry had not yet determined if this was the largest request in its history, but confirmed it surpasses the combined 5.27 trillion yen allocated to METI in the current fiscal year's initial and supplementary budgets.
Of the total requested amount, 6.31 trillion yen is designated for investments under Takaichi's "strong and prosperous Japan" initiative. This includes 2 trillion yen specifically for AI, semiconductors, and robotics; 680 billion yen for securing critical minerals such as rare earths; 220 billion yen for strengthening naphtha supply capabilities; and 180 billion yen for enhancing defence and dual-use capabilities in collaboration with the Defense Ministry.