JETRO Invest Japan Report 2023
Chapter3. Recent Government Measures Section1. Basic Policy on Economic and Fiscal Management and Reform 2023

Japan is facing a number of simultaneous and compounded challenges at home and abroad. For example, it is exposed to structural changes in the international environment, such as Russia's invasion of Ukraine, infections of COVID-19, and climate change issues, while suffering domestically from soaring prices of imported resources, low birthrate and aging population/declining population, stagnant potential growth, and more frequent and severe disasters.

Under these circumstances, it is necessary to overcome difficulties while making the efforts to solve social issues themselves an engine of growth. In order to further vigorously expand the current positive trends, such as the first high level of wage increase in 30 years and the high appetite for investment in the corporate sector, Japan will accelerate our efforts to realize the "New Form of Capitalism" and aim to create an economic society suitable for the new era. Against this backdrop, the "Basic Policy on Economic and Fiscal Management and Reform 2023" was approved by the Cabinet on June 16, 2023.

The "Basic Policy on Economic and Fiscal Management and Reform 2023" shows the basic policies for the government's economic and fiscal management and reform. In particular, in terms of accelerating the realization of the "New Form of Capitalism," it states that the government will carry out "Trinity Labor Market Reforms" of "support for skill improvement through reskilling," "introduction of job-based pay on the reality of individual companies," and "facilitating labor transfer into growth areas," and strengthen "investment in people" and create a substantial middle class. It also mentions drastic strengthening of measures to cope with the declining birthrate and child policy and realizing of an inclusive society.

In particular, the following initiatives are cited as measures to "expand investment and implement economic and social reforms."