TOKYO (TR) – Japan’s government has decided to abolish the “Cool Japan Fund,” a state-backed public-private investment vehicle, after it accumulated a staggering 54 billion yen in losses, it was learned on Friday, reports the Mainichi Shimbun (Aug. 21).
The Ministry of Economy, Trade and Industry (METI) has formally abandoned plans to submit a budget request for the fund for fiscal 2027, concluding that it would be impossible to gain public understanding. As a result, the organization is now effectively paralyzed and stripped of its ability to make new investments.
Established in 2013, the fund was a flagship initiative of the second administration of late Prime Minister Shinzo Abe. It was designed to serve as the symbolic engine for the “Cool Japan” strategy, which aimed to aggressively export Japanese culture and products overseas. Instead, a decade of dismal investment performance has severely undermined the credibility of government-backed investment schemes.
The fund’s financial bleeding has continually worsened due to the poor performance of its portfolio companies. The deficit grew far beyond expectations for fiscal 2025 after Spiber, a Yamagata-based bio-materials startup that received roughly 14 billion yen in backing from the fund, fell into insolvency and entered private restructuring.
Completely scrapping the fund
METI convened the first meeting of an expert panel in late July to discuss the organization’s potential consolidation or abolition. However, according to government sources, negotiations are already proceeding under the strict premise of completely scrapping the fund.
The focus will now shift to determining the specific timeline for the shutdown—and assigning responsibility for the colossal financial failure.
