Japan weighs government-backed bank lending scheme to spur strategic investment
EWJ•Japan is considering routing government-backed funds through private lenders and offering partial loss guarantees to support corporate investment. The government aims to mobilize more than 370 trillion yen ($2.4 trillion) in strategic-sector investment by fiscal 2040.
1. Proposed lending framework
Japan's Ministry of Economy, Trade and Industry is studying an expansion of a financing framework that would let Japan Finance Corp provide funds to commercial banks, which would then lend to companies undertaking large-scale investments and acquisitions. The government would also provide partial loss guarantees on qualifying loans to reduce lenders' credit risk.
2. Investment target
The proposal was presented at a public-private investment forum created under the government's asset management strategy. The government expects demand for financing to rise as companies invest in 17 priority sectors, including semiconductors and AI, and has set a target of mobilizing more than 370 trillion yen ($2.4 trillion) in public and private investment in strategic sectors by fiscal 2040.
