Prime Minister Takaichi Pledges Domestic Investment and Regional Clusters

The meeting was held at the Prime Minister’s Office on July 23, 2026, with prefectural assembly speakers from across Japan participating. Prime Minister Takaichi positioned it as an opportunity to hear directly from assembly speakers involved in regional development and residents’ welfare.

The vision of Japan under the Takaichi Cabinet is a society where people can live safely wherever they reside among Japan’s 47 prefectures, receive necessary medical and welfare services and high-quality education, and secure places to work. The Prime Minister explained that raising the potential growth rate, which has remained sluggish for a long period, is necessary to achieve this vision.

The government recognizes that Japan’s capacity for technological innovation and labor efficiency are comparable to those of other countries, while domestic investment remains insufficient. It aims to shift away from excessive austerity and insufficient investment in the future, creating a virtuous cycle of growth linking public- and private-sector investment, supply capacity, employment and income, consumption, and business earnings.

If the budget outlook becomes easier to anticipate, private businesses and local governments may find it easier to formulate investments and business plans with multiple fiscal years in mind. In particular, a framework for continuously advancing crisis-management and growth investments could support stronger regional supply capacity and job creation.

When prefectures, municipalities, and cities submit proposals based on ideas originating in their regions, local-government initiative is more likely to be reflected in regional industrial policy. Soft-support measures led by local governments will be supported through expanded Regional Future grants. The government will also consider establishing Regional Future allocations for equipment-investment subsidies and human-resource development support measures.

The government presented policy goals of securing safe living conditions, necessary medical and welfare services, high-quality education, and places to work nationwide. Advancing measures through careful discussion between regional assemblies and the government will affect the realization of policies that reflect regional circumstances.

The Takaichi Cabinet outlined a policy of limiting supplementary budgets to highly urgent measures and, in principle, providing for permanent measures through the initial budget. It will establish a “Strong and Prosperous Japan” investment framework separately from ordinary expenditures and implement measures predictably to raise potential growth through domestic investment.

The Japan Growth Strategy expects cumulative public- and private-sector investment to exceed 370 trillion yen by fiscal 2040. Regarding government investment, the budget-formulation process will identify and develop support measures that are truly necessary and effective for realizing private investment in strategic fields.

The Regional Future Strategy promotes three types of plans: Strategic Industry Cluster Plans, Regional Industry Cluster Plans, and Local Industry Growth Plans. For Regional Industry Cluster Plans based on prefectural ideas and Local Industry Growth Plans based on municipal ideas, the government will advance infrastructure development and expand Regional Future grants to support soft-support measures by local governments.

To support proposals originating in regions, the government will also consider establishing Regional Future allocations within national equipment-investment subsidies for medium-sized and small businesses and human-resource development support measures.