Japan Tightens Residency Rules on the Day Takaichi Promises a Growth Plan

Japan's government tightened the requirements for permanent residency on Thursday. Applicants must now show that their annual household income exceeds the Japanese average, that they can hold a casual conversation in Japanese, and that they hold pension savings equivalent to thirty years of payouts. The rules take effect in phases and apply retroactively to applications filed since April. Prime Minister Sanae Takaichi, who won a supermajority in February on a platform built around immigration reform, has described the goal as orderly coexistence with foreign nationals.

Hours later she was due to tell parliament that her administration will prepare a five-year growth strategy setting out a path for domestic investment, with the emphasis on economic expansion and on giving citizens reason for optimism. Al Jazeera reported that the broader tightening of rules for foreign residents has already left long-settled workers uncertain about their status.

The two policies pull against each other in the labour market. Japan's working-age population is shrinking, and construction, nursing care, logistics and food service have relied on foreign labour to fill vacancies. Raising the bar for permanent settlement does not remove those workers immediately, but it reduces the incentive to build a career in Japan, and it narrows the future pool just as the government promises a domestic investment push that requires builders and engineers.

The Bank of Japan is working on the same problem from the monetary side. Its September board discussed the need to prevent inflation from overshooting the 2% target, and wage growth in labour-short sectors is a central part of that calculation.