On the 19th, the Japanese government approved a revision of the Economic Security Promotion Law aimed at enhancing its responses to threats against national security and interests posed by economic and technological activities. This law primarily supports companies considered critical for economic security in conducting overseas operations, allowing the government to bear the risk of losses associated with these ventures. Prime Minister Sanae Takaichi has introduced this measure as part of a 'crisis management investment' initiative aimed at expanding Japanese technology overseas, particularly to counter the 'weaponization of the economy' by countries like China.

The revised law introduces a new mechanism for state investment in overseas projects that are crucial for economic security but have uncertain profitability, thus discouraging enough private investment. The Japan Bank for International Cooperation (JBIC), a government-affiliated financial institution, will create a dedicated fund management framework to channel public funds from the national treasury into these investments. One of the law's key features is its increased tolerance for projects that may incur losses compared to previous regulations, allowing JBIC to adopt a subordinated investment approach where profit sharing occurs after standard equity returns, making it easier to attract private participation.

Overall, this move is indicative of Japan’s strategic pivot in economic security, reflecting a broader global trend of nations fortifying their economic infrastructures against perceived external threats. By adjusting the risk assessment parameters for state investments, Japan intends to bolster its technological foothold globally while simultaneously addressing vulnerabilities presented by foreign economic policies deemed aggressive or harmful.