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New Year Greetings 2025 - Minister of Economy, Trade and Industry

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Introduction

I would like to wish you all a Happy New Year.
Last year, many unexpected natural disasters occurred, including the Noto Peninsula Earthquake at the beginning of the year along with typhoons and heavy rains. Once again, I offer my heartfelt sympathy to those who have been affected by the disasters. In particular, the regions affected by the Noto Peninsula Earthquake are still only halfway along the path to restoration and recovery, including the rebuilding of livelihoods. I visited the affected regions in person last year to observe the situation there with my own eyes and listen to the voices of affected business operators who are hoping to recover from the damage. The repeated disasters must not be allowed to spoil the hopes of those who are dedicating themselves to the future of the affected regions. The Ministry of Economy, Trade and Industry (METI) will continue to do its utmost to promote restoration and recovery through the support measures included in the economic package that was adopted last year.
In 2024, amid global upheaval, we faced the question of how to preserve economic and social stability in Japan. There is still no sign of an end to the wars in the Middle East and Ukraine. Japan’s energy and industrial policy have also been considerably affected.
As a new administration under President Trump is about to be inaugurated in the United States, the world is keeping a watchful eye over the incoming administration’s every move for clues as to how the U.S. economic and foreign policies may change. Under these circumstances, Japan has continued efforts to maintain energy security and international cooperation and, at the same time, strengthened initiatives to achieve a new energy transition and secure resources from a long-term perspective.
As for domestic affairs, Japan is confronted with a huge pile of challenges, including the shrinking population, the deflationary economy that has continued for more than 30 years, the heightened geopolitical risks, and the declining international competitiveness of its companies. We must squarely look at those international and domestic challenges, adapt to changes, and revitalize Japan’s economy.
As for industrial policy, as active domestic investments made over several years in growth sectors, such as digital transformation (DX) and green transformation (GX), begin to bear fruit, bright spots have started to appear. The results so far achieved include the highest rate of wage increase in 30 years, companies’ aggressive investment stance exemplified by capital investments totaling more than 100 trillion yen, record high stock prices, and the first-ever rise in the value of nominal GDP above 600 trillion yen.
On the other hand, consumption is still lacking in strength against the backdrop of rising prices. While wages are increasing nationwide, the rate of increase varies from region to region and from sector to sector.
To consolidate the shift from the long-standing cost reduction-focused economy to an economy driven by wage increases and investments, we must realize sustainable wage increases that outpace price rises and create a positive cycle leading to further consumption and investment.

Bold investment for growth through public-private collaboration

To that end, first of all, we will promote the development of industries that create an earning power that enables Japan to continue generating profits in the future.
The economic benefits of large-scale investments made through collaboration between the public and private sectors spread beyond the large companies that actually make investments. The benefits awaken the potential investment appetites of local regions, including those of local small and medium-sized enterprises (SMEs), acting as a catalyst for regional revitalization.

In the AI and semiconductor sectors, in which the global market is expected to grow considerably, we will provide public financial support worth more than 10 trillion yen in total by FY2030. Through this support, we aim to create an overall economic spillover effect worth 160 trillion yen by realizing public and private investments totaling more than 50 trillion yen over a ten-year period. Moreover, in order to secure a sufficient domestic supply capacity regarding next-generation semiconductors, we will conduct a study on legislation to provide the necessary support for the start of mass production with a view to submitting the bill to the next ordinary session of the Diet.
We will also actively support the promotion of innovation. In the quantum sector, we will realize large-scale investments in order to develop a research and development base of the highest standard in the world. In the aviation sector, while pursuing international cooperation, we will promote public and private investments in projects that look forward to developing next-generation aircraft that contribute to decarbonization. In the space sector, we will provide support for technology development in order to promote the launch of rockets and satellites and to accelerate the use of data obtained from space development activity.
In the biotechnology and healthcare sector, we will promote the building of domestic manufacturing bases for biopharmaceuticals, research and development on medical equipment, and social implementation of nursing care technology and healthcare services. In the creative sector, including content, we will support the overseas business expansion of creators and business operators and enhance the creation of entertainment startups.
We will also support the commercialization and overseas business expansion of startups generating innovation that accelerates the growth of Japan.

Developing an environment that realizes sustainable and structural wage increases

In order to enable companies to earn profits and secure funds for wage increases, it is extremely important to promote smooth and prompt price pass-through.
We will step up efforts to ensure appropriate supplier-customer transaction practices. In addition to making particular efforts in March and September, both of which have been designated as price negotiation promotion months, we will strive to strengthen information collection regarding the actual circumstances of transactions and to further expand and increase the effectiveness of the Declaration of Partnership initiative. In addition, in order to ensure appropriate price pass-through on a stable basis throughout the entire supply chain, we will consider, with the Japan Fair Trade Commission, amending the Subcontractor Act.
Moreover, in order to fundamentally reinforce the earning power of companies, we will assist investments for productivity improvement and labor saving by SMEs and also support investments for growth by mid-sized enterprises that lead regional economies and SMEs that aim for annual sales of 10 billion yen.

Response to energy price rises

In addition to implementing measures to support growth, we will provide support for those who are struggling with energy price rises amid the continued inflationary pressures.
Regarding electricity and gas charges, we will provide support for them from January to March, when the volume of electricity use is large. We will also gradually prepare for ending the program to mitigate the impact of steep rises in fuel prices.
That kind of support should not be continued forever. At the same time, we will promote an energy structure change. In addition to securing decarbonized power sources, we will promote energy conservation in companies and households by assisting the introduction of energy-saving equipment and assessment of energy conservation at factories and other business establishments and by supporting the purchase of high-efficiency water heating equipment by households. We will also support the introduction of clean energy vehicles.

GX and energy policies

It is also important to aim to achieve a stable energy supply, economic growth, and decarbonization in an integrated manner through GX. At the end of last year, we adopted drafts of the GX2040 Vision and the Strategic Energy Plan. As electricity demand is expected to grow due to the advance of DX and GX, we will promote thorough energy conservation and maximum use of decarbonized power sources, such as renewable energy and nuclear energy, based on the recognition that securing decarbonized power sources is critical to Japan’s national strength.

More specifically, in order to further expand the introduction of renewable energy, we will promote the development of supply chains for perovskite solar cells and offshore wind power, the advancement of geothermal and small and medium-scale hydroelectric power generation, and the introduction of storage batteries. Regarding nuclear power, with the ensuring of safety as the underlying premise, we will strive to accelerate the restart of nuclear power stations while seeking the understanding of the host communities. At the same time, we will work out the specifics of the development and construction of next-generation innovative reactors and accelerate back-end processes, including reprocessing and final disposal. We will also promote the large-scale supply and use of hydrogen and other clean energy sources.
Going forward, we will realize GX by putting into practice measures to expand investments in decarbonized power sources and carbon pricing and by implementing support and regulatory measures and institutional programs in an integrated manner. Realizing a circular economy is also important for GX, so we will conduct studies on promoting environmentally friendly design through cooperation between industry, academia and government, in addition to expanding the use of recycled materials.
In promoting GX, we will deepen cooperation with Asian partner countries. At the second AZEC summit, an agreement was reached on the Action Plan for the Next Decade under Japan’s leadership.
Based on this agreement, we will promote rulemaking and other policy coordination activities and implement projects in cooperation with partner countries along diverse paths that suit the respective circumstances of each country.

External economic policy

The international environment surrounding Japan is changing from moment to moment. Under the policy of maintaining and strengthening the rules-based international economic order through the WTO and economic partnership agreements, we will continue close dialogue with the new Trump administration of the United States, other important like-minded countries, and neighboring countries.
The importance of ensuring economic security is also growing. It is important to further secure the superiority of Japanese products and technologies and ensure the supply of critical materials that Japan needs by implementing policy measures to increase supply chain resiliency, including investments in technological innovation and demand-side initiatives. We will provide forward-looking support for resource development projects intended to secure the supply of gallium and other rare metals, upstream interests in copper, and energy supply stability.
We will create projects that promote collaboration between Japanese and local companies in Global South countries, including AZEC members, which are achieving remarkable growth, in order to ensure the development of rules that are beneficial for the Japanese economy.
Amid Russia’s continued aggression against Ukraine, we will cooperate with local companies and third-party countries, including Central and East European nations, in order to continue providing reconstruction support by taking advantage of Japanese companies’ strengths.

Reconstruction of Fukushima

The reconstruction of Fukushima and steady decommissioning of Fukushima Daiichi Nuclear Power Station continue to be the most critical tasks for the Ministry of Economy, Trade and Industry. Under the policy of assuming full responsibility for addressing those tasks until the completion of the disposal of ALPS treated water, the government will call for the removal of import restrictions imposed by some countries and regions against Japanese fishery products and also do its utmost to secure safety, mitigate reputational damage, and continue providing livelihood support.
The successful experimental retrieval of fuel debris last year was an important step ahead of the start of full-fledged decommissioning work.
Going forward, it will continue to be important to proceed with this work while ensuring safety. We will support research and development concerning the retrieval of fuel debris so that decommissioning can be steadily implemented.
At the same time, we will promote the steady reconstruction of the disaster-affected regions through activities to prepare for the lifting of the evacuation order in the restricted areas, rebuilding of businesses and livelihoods, the Fukushima Innovation Coast Framework, the creation of new industries, the expansion of nonresident and engaged populations, and the initiative to create new tourism attractions through arts and culture.

Expo 2025 Osaka, Kansai

Finally, let me mention the Expo 2025 Osaka, Kansai. The expo, to be held under the theme “Designing Future Society for Our Lives,” will be an opportunity to welcome visitors from around the world and to demonstrate and socially implement cutting-edge technologies, including AI and robots, GX, DX, and life sciences, under the People’s Living Lab concept. The event will become a springboard for Japan to open the path toward further development by exercising leadership in resolving global challenges. We will use resourceful ideas to give visitors a first-hand feeling of what our future society will be like and use the expo as a forum where we, together with the children on whose shoulders the future depends, can think about what kind of future we should create. METI will strive to make the expo a successful event as a major policy initiative of this year.

Closing remarks

According to the traditional Chinese horoscope, 2025 is the Year of the Wood Snake. Wood is a symbol of new sprouting and growth, while the snake represents an animal that transforms itself and grows through repeated molting, symbolizing "regeneration." In the Year of the Wood Snake, we hope to carefully build on the emerging bright spots of the Japanese economy, breathe new life into the economy through the expo as a pivotal event, and shed its stagnation over the past 30 years and regenerate anew. I appreciate your continued cooperation.

January 1, 2025
MUTO Yoji, Minister of Economy, Trade and Industry