- Japan's Growth Strategy
- Wage Increases
- National Council on Social Security
- Japan-China Relations
- Japan-India Joint Economic Forum
- Diet Proceedings
Japan's Growth Strategy
(In response to a question about the basis for Keidanren's decision to raise its target for domestic private capital investment in FY2040 from the previous 200 trillion yen to 250 trillion yen, and about whether it intends to disclose progress along the way) The estimate of the medium- to long-term outlook for the economy and public finances under Japan's Growth Strategy puts nominal GDP in FY2040 at 1,100 trillion yen, up from the previous 1,000 trillion yen, and domestic private capital investment at 230 trillion yen. Building on bolder government involvement under Japan's Growth Strategy, and wishing to set out, as the private sector, a level above the government's own projection, we set the target at 250 trillion yen.
Going forward, we will strongly call on companies to shift their mindset toward establishing an investment-driven economy. As for the public-private investment roadmap, we understand that the PDCA cycle will be run through the Council for Japan's Growth Strategy, and Keidanren will also check each year how domestic private capital investment is developing and take the necessary steps as they arise, such as urging the government to improve the environment for greater predictability of investment. While we are not planning to publish progress at this stage, we intend to consider doing so.
(In response to a question about which fields he sees as especially promising as Keidanren aims to raise domestic private capital investment in FY2040 to 250 trillion yen) At today's meeting of the Chairman and Vice Chairs, there were many references to physical AI. Within the public-private investment roadmap under Japan's Growth Strategy as well, momentum is building to nurture homegrown AI centered on physical AI, and a commensurate budget is expected to be allocated. Some argue that Japan's greatest strength lies in holding its on-the-ground capabilities, its so-called experiential knowledge, in the form of data. By fusing this with robotics, we see real potential for Japan to gain international competitiveness in physical AI, and we are watching this with keen interest and high expectations. We recognize that the constraint on labor supply is the biggest bottleneck to raising Japan's potential growth rate, and we believe physical AI could become an important means of overcoming it.
(In response to a question about when the decision was made to put forward the 250 trillion yen target, and whether he had felt any pressure within the Council for Japan's Growth Strategy to raise it) The decision to put it forward was made only very recently. I felt no pressure. With the government's bolder involvement set out so strongly, I did of course sense the expectations placed on the private sector.
(In response to a question about whether a conflict of interest might arise from Chairman Tsutsui, a former chairman and executive advisor of the institutional investor Nippon Life, being involved as an expert member of the Council for Japan's Growth Strategy in promoting public-private investment across its 17 strategic fields) At neither the Council on Economic and Fiscal Policy nor the Council for Japan's Growth Strategy have I ever spoken about individual stocks. I have referred in broad terms to growth areas such as AI and semiconductors, but only from the standpoint of strengthening Japan's growth potential. I do not believe those remarks will be reflected in Nippon Life's business activities as an institutional investor. Nippon Life's stance as an institutional investor is to manage the valued funds entrusted to it by its customers objectively, rationally, and with a high degree of transparency. My remarks must never influence its selection of stocks, and I have no intention whatsoever of allowing that to happen.
I remain conscious that some may hold the concern you raise, and I will keep it in view whenever I speak at public councils going forward.
Wage Increases
(In response to a question about his assessment of the first tally of settlement figures by industry at major companies for 2026 summer bonuses and lump-sum payments, which Keidanren released on July 2) In value terms, the figure set a record high for the third consecutive year among comparable data going back to 1981, exceeding one million yen for the first time, while the rate of change from a year earlier was positive for the fifth year running. Although the figure has climbed year after year to a high level and the pace of increase has slowed somewhat, we take it that the result was, fundamentally, one that gave a stronger sense of progress toward further entrenching the strong momentum for wage increases.
Going forward, we must continue to consider how to position the rate of change in bonuses and lump-sum payments, alongside increases in monthly wages, in relation to the rate of inflation. Many companies calculate bonuses and lump-sum payments on the basis of monthly wages, and we believe that further entrenching the strong momentum for wage increases through each year's spring labor-management negotiations, including base pay raises, will in turn lead to high levels of bonuses and lump-sum payments.
National Council on Social Security
(In response to a question about how he views the somewhat stalled discussions at the National Council on Social Security, against the backdrop of factors such as the absence of any identified alternative revenue source for a consumption tax cut on food) When it comes to a consumption tax cut on food, we regard the clear identification of alternative revenue sources as an absolute prerequisite for maintaining market confidence and ensuring the sustainability of the social security system. At the same time, the draft interim report clearly limits the period of the consumption tax cut to two years, and we consider that highly important.
(In response to a comment suggesting that there has still been almost no discussion of alternative revenue sources and that progress has been slow) We share that view. We expect the matter to be taken up in the course of compiling the FY2027 budget, and the idea of drawing on tax revenues that come in above projections has also emerged, but in any case, unless alternative revenue sources are clearly identified, Keidanren will be unable to take a clear stance either.
Japan-China Relations
(In response to a question about the results of Vice Chair Kubota's visit to China and any change in circumstances regarding the dispatch of the postponed joint economic delegation to China organized by the Japan-China Economic Association) We see Vice Chair Kubota's recent meeting with senior officials of the China Council for the Promotion of International Trade as meaningful at a time when we are seeking openings for dialogue through various channels. We hope this visit will serve as a catalyst that leads to the dispatch of the delegation. That said, the schedule for the delegation remains undecided at this stage, and no concrete arrangements have yet been made. Going forward, we will need to proceed while weighing a range of factors, including the state of consultations with the Chinese side and the arrangements for receiving the delegation, and we intend to continue the dialogue with those involved.
(In response to a question about how he views the impact of China's export control measures and how Keidanren will respond, following China's addition of a further 20 Japanese companies and organizations to the list of entities banned from receiving exports of dual-use goods) Following the tightening of export controls this past January and February, these latest measures have been imposed by adding still more named Japanese companies to the list. This is extremely regrettable, and we call for the measures to be withdrawn.
We have been gathering the views of member companies and hearing about conditions individually from Vice Chairs and from companies serving as Vice Chairs of the Board of Councillors. These latest measures come as the impact of the export control measures had been gradually escalating, and we will continue to keep a close watch on their specific content and effects. We will also listen to member companies about conditions on the ground and respond as necessary in coordination with the government.
Japan-India Joint Economic Forum
(In response to a question about how he views the Japan-India Joint Economic Forum held to coincide with the Japan-India summit, and its impact on the Japanese economy) Around 150 Japanese companies took part in the forum, and it was announced that 129 cooperation agreements had been concluded between private-sector parties and that business opportunities worth more than 2 trillion yen had been created. This further heightened the momentum toward strengthening economic relations between the two countries going forward, and was highly significant. Japan-India relations are strongly complementary in nature, and if Japan's technology and India's high growth potential and human resources complement one another, this should support growth for both countries, in terms of economic security and energy security as well. At the same time, as we advance cooperation with the Global South to maintain and strengthen a free and open international economic order, it is deeply significant that Japan and India should become important partners.
Diet Proceedings
(In response to a question about how he views the political situation, in which deliberations in the special Diet session have stalled and an extension of the session is being talked about) Whether or not to extend the session is a matter for the political side to weigh. We face a range of challenges at home and abroad, and Keidanren hopes the ruling and opposition parties will steadily and fully deliberate the important bills.