Under the Takaichi administration's growth strategy, total public- and private-sector investment has been presented at more than ¥370 trillion, shifting the focus from supporting demand to overhauling the supply structure. Monetary and fiscal policy is said to prioritize creating an environment in which the private sector can take on risk more readily.
Since the bursting of the bubble economy, Japan's policies have focused primarily on supporting demand, but there is now growing recognition that reform on the supply side is important for gaining confidence in a new growth trajectory.
The growth strategy put forward by the Takaichi administration points to a different approach from those taken previously, with the stated aim of transforming the supply structure by stimulating business investment.
The core of the growth strategy is the role of monetary and fiscal policy in creating a macroeconomic environment in which companies can invest more readily. The strategy is explained as requiring not only demand stimulus but also stronger supply-side capacity.
The importance of more than ¥370 trillion in public- and private-sector investment lies not so much in the amount itself as in creating an environment that makes it easier for the private sector to invest and in establishing mechanisms that improve predictability, according to one view.