Where to Begin

Former Japanese Prime Minister Fumio Kishida stated that the joint intervention by the United States and Japan has temporarily supported the yen, but it will not fundamentally alter the currency's exchange rate or the economic landscape. He emphasized that the 370 trillion yen ($2.3 trillion) growth strategy is a long-term vision that could change Japan's fortunes.

In an interview on Wednesday, Kishida remarked, "In terms of exchange rates, it might buy some time, but unless the basic economic situation and the broader environment change, it may ultimately not have a much greater effect." The U.S. and Japan announced on Monday that they had intervened in the foreign exchange market last Friday to bolster the yen.

Kishida leads a faction within the ruling party that advises Prime Minister Shigeru Ishiba, helping to shape a 14-year growth strategy covering 17 strategic areas. He dismissed concerns about the sources of funding, citing Japan's emerging semiconductor and artificial intelligence industries as examples of how the economy can accelerate growth.

"The government should act as a catalyst. We should use public funds as seed money to attract private sector capital, including Japan's 2,300 trillion yen in household financial assets and substantial investments from overseas. If we only consider the government's own fiscal resources, we have no starting point," he said.

Amid growing concerns about Japan's fiscal sustainability, Ishiba is striving to push the economy onto a faster growth track through government funding. Meanwhile, despite Japan's debt burden being among the highest in major global economies, Ishiba is actively advancing plans to reduce the consumption tax on food and has publicly stated intentions to increase defense spending. The details of how these plans will be funded remain unclear.

Ishiba has promised that the situation will become clearer in the coming weeks when she undertakes a comprehensive reform of the budget process. This uncertainty has unsettled investors. If this investment amount is simply divided by the 14-year timeframe, the ambitious growth plan aims to generate an average of over 26 trillion yen in domestic investment annually. Even if Tokyo provides only one-third of that investment, it would far exceed the annual burden of the consumption tax reduction.

Kishida stated that the issue is not about the numbers but about confidence in Japan's economic development trajectory. "Simply announcing a specific numerical target now will not immediately convince overseas investors or win their trust. What matters is presenting a clear long-term vision," he said. "Once that is achieved, people will be able to see just how large the opportunities are."