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To fund the effort, the government has committed to a 350 billion yen fund, implemented in three stages, with an initial 120 billion yen allocated in the fiscal 2025 supplementary budget. Public and private investment together are expected to total around 1 trillion yen, roughly 6.3 billion yen, over the next decade.

A separate “national dockyard” plan, reported by Nikkei and estimated to cost about 1 trillion yen, would have Tokyo pay for the repair or building of shipbuilding facilities, which would then be given to private companies to run. This approach aims to boost capacity that individual shipbuilders might not be able to afford on their own.

Minoru Kiuchi, Japan’s minister of economic security, has described reviving the shipbuilding industry as critically important for economic security, saying the government would work with the land ministry to strengthen supply chains and ensure a stable supply of vessels.

The push comes as Japan’s shipbuilding market share has fallen to under 10% of global new orders, down from around 20% at its peak, having been overtaken decades ago by state-backed rivals in South Korea and China.

Total shipbuilding employment in Japan fell from more than 90,000 in 2016 to 70,300 in 2023, according to the OECD, compounding capacity constraints even as order backlogs at Japanese yards now extend through 2029.

The dock expansion is also closely tied to Japan’s trade and defence relationship with Washington.

Tokyo pledged USD 550 billion in investment in strategic American industries, including shipbuilding, as part of a 2025 trade agreement with the Donald Trump administration, and the two countries have since signed a memorandum on shipbuilding cooperation, alongside a separate USD 100 million AI-driven shipbuilding research project.

A Japan-US shipbuilding working group has been examining standardising ship design and parts, with some proposals suggesting Japan design components that could be manufactured in the United States to help rebuild American shipyard capacity, which the Pentagon regards as critically depleted.

Industry leaders, led by Imabari Shipbuilding chairman Yukito Higaki, have pressed the government for direct financial support to meet the 2035 capacity target, arguing that Japanese yards cannot compete on price alone against state-subsidised Chinese and South Korean rivals.

Steel price inflation and a chronic shortage of skilled labour, partly offset by a rising share of foreign workers now estimated at 20% of the workforce, remain key risks to the timeline, according to industry analysts tracking the roadmap’s progress.

If the 2029-2031 phase proceeds as planned, the resulting facility would mark Japan’s first large new shipbuilding dock in well over a decade, a milestone officials hope will signal the Far East Asian country’s return as a serious contender in the global shipbuilding order book.