Japan aims for 1,100 trillion yen nominal GDP by 2040 with 370 trillion yen investment push

The Japanese government has set a target of 1,100 trillion yen in nominal GDP by the fiscal year 2040. To reach this, it plans to sustain growth above 3% annually, relying on a combination of inflation and a public‑private investment programme of more than 370 trillion yen in strategic sectors such as AI, semiconductors and space.

Critics argue that the investment alone will not revive domestic corporate spending, pointing to entrenched regulatory barriers in areas like agriculture, healthcare and ride‑sharing. They call for broader structural reforms, including labour‑market flexibility and effective measures against low birth rates, to unlock private investment.

If the plan proceeds, the yen could weaken toward the historic 230 yen per dollar level seen after the 1985 Plaza Accord, potentially raising import prices and imposing an inflation tax of roughly 40 % on households holding yen deposits.