The number of births in Japan has fallen below 700,000 for the first time, occurring 14 years earlier than previously projected. The structural issue of Japan's rapidly progressing "declining birthrate and aging population," advancing at a pace beyond our expectations, is generating various challenges across society. Among these, Japan's fiscal condition is exceptionally severe on a global scale, making fiscal consolidation an unavoidable and critical challenge.

There is no magic solution to dramatically improve Japan's fiscal situation in a short period. The only viable path forward is to achieve an early primary balance surplus and steadily improve the debt-to-GDP ratio. While discussions on optimizing expenditures—particularly social security-related costs—are essential, efforts to increase revenue are equally important to avoid falling into a state of declining equilibrium. The fundamental approach to this is the sustained growth of the Japanese economy.

Turning our attention to the financial and capital markets, we are witnessing the emergence of significant structural changes. In February last year, the Nikkei Stock Average finally broke free from a 34-year-long stagnation and surpassed the highest levels seen before the bubble burst. Concurrently, the major overhaul of the NISA (Nippon Individual Savings Account) system has made it so that one in every four adults now holds an account, signaling its deepening roots in the lives of Japanese citizens. The long-stalled shift "from savings to investment" is now gradually, yet surely, gaining momentum amid substantial tectonic shifts.

The resurgence of individual investors contributes to economic growth. Companies can channel newly injected risk capital into growth investments, enhancing corporate value and returning the fruits of such investments to households through dividends and stock price appreciation. This redistribution further stimulates additional investment and consumption. This virtuous cycle is the driving force behind Japan's sustainable economic growth. Household financial assets continue to reach record highs, presenting a once-in-a-generation opportunity to realize a "virtuous cycle of growth and wealth sharing." We must not let this golden opportunity slip away.

Looking globally, divisions and multipolarity are becoming increasingly severe, deepening the complexity of the international landscape. Now is the time for Japan to assert its presence and, united across the public and private sectors, boldly rise to the challenge of securing a prosperous future for the next generation.