The strategy earmarks 101.6 trillion yen specifically for AI and chip development, betting that state-led capital allocation will spark a domestic investment renaissance. Takaichi maintains that Japan’s core technological and labor efficiency metrics remain globally competitive, arguing that a lack of internal investment is the primary barrier to robust growth. Credit Agricole economist Takuji Aida supports this outlook, suggesting the stimulus could help the economy break its cycle of stagnation by 2028.

However, the scale of the commitment has spooked bond markets and fiscal conservatives. Takahide Kiuchi, an economist at the Nomura Research Institute, warns that the government could be on the hook for 160 trillion yen in direct spending—nearly half the total project cost—which risks distorting market dynamics. Kiuchi, a former Bank of Japan board member, cautioned that forcing capital into potentially unprofitable fields could backfire, placing further strain on Japan's already heavy debt load. With the benchmark 10-year government bond yield recently hitting a 30-year high of 2.8%, investors remain wary that the plan will necessitate a surge in new bond issuance, keeping fiscal anxiety at the forefront of the market.