Japan moves to scrap Cool Japan Fund while pushing content grants

Japan is moving toward abolishing its loss-making Cool Japan Fund, while seeking to expand a separate program to promote Japanese content overseas.

The Ministry of Economy, Trade and Industry (METI) plans to omit funding for the public-private fund from its fiscal 2027 Fiscal Investment and Loan Program request, media reports said Thursday.

Established in 2013 under then-Prime Minister Shinzo Abe, the Cool Japan Fund was intended to help Japanese content, food and other products reach overseas markets. It received capital from the government and private-sector shareholders, which it used to invest in various companies and projects.

Yet the fund struggled from the outset amid criticism that it lacked the expertise needed to identify viable investments, with money poured into companies unrelated to content creation.

Among its biggest failures was a roughly ¥14 billion ($88 million) investment in biomaterials startup Spiber that failed to achieve commercial viability and entered into private restructuring after becoming insolvent.

By the end of fiscal 2025, the fund’s accumulated losses had reached approximately ¥54 billion.

“Primary responsibility for managing the Cool Japan Fund … rests with its executives,” industry minister Ryosei Akazawa said at a news conference in June, adding that METI also bore responsibility as its supervisor.

An expert panel launched last month is considering whether to dismantle the fund or integrate it with other institutions, with a decision expected by the end of the year. If dissolved, some of the government’s capital may not be recovered.

Meanwhile, METI is expanding support for creative industries through its IP360 grant-based program, whose first application rounds opened in March.

Backed by ¥35 billion from the fiscal 2025 supplementary budget, IP360 provides project-based subsidies for the development and overseas expansion of Japanese content, rather than taking equity stakes in businesses.

Benjamin Boas, a government-appointed Cool Japan producer and Tokyo-based cultural consultant, said the fund’s shortcomings weren’t due to the world losing interest in Japan, but came “because it never developed a disciplined way to serve that demand.”

In that sense, he believes the new IP360 project shows more promise as the government is actively learning from its past mistakes.

Boas said IP360’s credibility will ultimately depend on realized results, transparent selection and whether lessons from the fund’s failures are genuinely incorporated before another centralized support structure is built.

The ministry aims to raise overseas sales of Japanese content to ¥20 trillion by 2033.