Japan

NHK | English | News | Jan. 9, 2026 | UndeterminedEmployment

A Japanese government panel has drafted an operational plan to accept up to 1.23 million foreign workers by the end of March 2029. This plan involves two pathways: the existing system for specified skilled workers and a new training program set to launch on April 1 next year. The new program is designed to train foreign workers to reach the skill level of specified skilled personnel within three years.

The draft plan breaks down the acceptance numbers by industrial sector. Under the current specified skilled worker system, 805,700 workers will be accepted across 19 fields, including industrial manufacturing and food and beverage production. The new training program will accept 426,200 workers in 17 fields, similar to those covered by the existing system but excluding automobile transportation and aviation.

The projected number of foreign workers was determined using factors such as the estimated domestic workforce size and anticipated productivity improvements. The government intends to present the draft plan to ruling parties and seek Cabinet approval later this month.

生産性測定におけるオフショアリング・バイアス：日本の輸出入申告データに基づくエビデンス

Research Institute of Economy, Trade and Industry | Local Language | AcademicThink | Jan. 9, 2026 | UndeterminedTrade Issues and Numbers

Since the 1990s, globalization and the expansion of global value chains (GVCs) have increased offshoring in Japan’s manufacturing sector, with imported intermediate goods reaching about 30% by 2021. This study addresses the "offshoring bias" in productivity measurement, where standard total factor productivity (TFP) estimates incorrectly interpret price declines from cheaper imported inputs as productivity gains, due to the use of industry-average deflators rather than firm-specific input prices.

Using firm-level data from Japan’s Ministry of Finance import/export declarations and the Ministry of Economy, Trade and Industry’s surveys for fiscal years 2015–2020, the study constructs firm-specific deflators based on detailed import price movements at the 9-digit HS level. It compares TFP growth rates calculated with standard industry deflators versus these firm-specific deflators to quantify the offshoring bias. The methodology includes Wooldridge’s GMM estimator and the index method of Good, Nadiri, and Sickles.

Results show that firms with higher import ratios have greater offshoring bias, meaning their productivity is overestimated by conventional measures. Firms importing from overseas subsidiaries exhibit smaller bias, likely due to more stable transfer prices. Industries heavily reliant on imports, such as electronics, machinery, and transportation equipment, experience larger biases, confirming the impact of industry structure on productivity statistics. These results are consistent across different sample periods, indicating robustness.

The study concludes that traditional productivity statistics are structurally upward biased by failing to capture firm-level input price changes, leading to potential misinterpretations in policy and international comparisons. Key implications include the need to adjust productivity comparisons for firm-specific import prices, caution in international productivity statistics that ignore varying import structures, and careful evaluation of industrial and trade policy impacts to avoid overestimating their effects. The authors emphasize incorporating microdata and refined price information to improve the accuracy of productivity measurement in the context of expanding offshoring.

日本経済、需要不足続く 積極財政で物価高加速も

Tokyo Shimbun | Local Language | News | Jan. 9, 2026 | UndeterminedInflation

The Bank of Japan reported on January 7, 2026, that the Japanese economy still faces insufficient demand for goods and services despite having surplus supply capacity, such as factory equipment and production. The supply-demand gap for July–September 2025 was minus 0.35%, slightly improved from minus 0.40% in the previous quarter, but demand shortage has persisted for 22 consecutive quarters since mid-2020. While price reductions could emerge, rising prices for certain items, especially food, remain unchecked due to factors including the weak yen.

Prime Minister Sanae Takaichi’s administration is pursuing a "high-pressure economy" policy aimed at creating a positive supply-demand gap to stimulate economic growth and demand through aggressive fiscal spending. This approach intends to keep the economy overheated but carries the risk of accelerating inflation. Minoru Kiuchi, minister responsible for economic and fiscal policy, has indicated discussions about reaching a supply-demand gap of plus 2% as part of this strategy.

Overall, the Japanese economy continues to grapple with weak demand despite available supply, while government policies focus on aggressively stimulating the economy, raising concerns about potential inflation acceleration.