Japan Eyes 1.5-Fold Rise in Industry Min. FY 2026 Budget

Tokyo, Dec. 22 (Jiji Press)–The Japanese government is considering allocating a total of 3,069.3 billion yen under its fiscal 2026 budget for policies linked to the industry ministry, a 1.5-fold increase from the fiscal 2025 initial budget, it was learned Monday. The government plans to earmark 1,239 billion yen for measures to advance the domestic development of artificial intelligence and semiconductors, for which the ministry had sought funds without specifying an amount in its budget request in August. The AI- and semiconductor-related expenditures will be included in the 2,533.3 billion yen allocated under the government’s special account for energy measures. The government plans to allocate 387.3 billion yen for developing a foundation model for domestic AI, which it hopes will lead to “physical AI” capable of operating robots. It plans to spend 150 billion yen in aid to semiconductor firms including Rapidus Corp., which aims to mass-produce next-generation chips. The fiscal 2026 budget will also include 1,151.4 billion yen for energy measures and steps to strengthen economic security, including conducting geological surveys for oil and natural gas overseas and securing stable supplies of rare earths and other critical minerals. The government also plans to issue 1 trillion yen in bonds to bolster the finances of state-backed Nippon Export and Investment Insurance, which guarantees loans by private financial institutions, in order to advance its pledge under a Japan-U.S. trade agreement to provide the United States with 550 billion dollars in investments and loans. Related legislation will be submitted to parliament next year. END [Copyright The Jiji Press, Ltd.]