The Japanese government has revealed a potential investment list under its $550 billion US investment initiative, offering the first glimpse into the key projects that may receive funding as part of a critical US-Japan trade agreement. This massive investment could further fuel the US stock bull market that began in early 2023, potentially overshadowing concerns about an "AI bubble" and sustaining the upward trajectory of equities.
On Tuesday, Japan’s Ministry of Economy, Trade and Industry (METI) released a fact sheet outlining projects proposed by major Japanese firms, spanning nuclear energy, semiconductors, shipbuilding, artificial intelligence, critical minerals, and quantum computing. The preliminary list includes companies like SoftBank Group, Westinghouse Electric, and Toshiba, with individual project investments ranging from $350 million to as much as $100 billion.
Hours before the announcement, US President Donald Trump praised the US-Japan alliance and commended Japan’s new Prime Minister, Sanae Takaichi, during a meeting where the two leaders signed agreements on trade and critical minerals. These documents formalize elements of prior negotiations, including Japan’s commitment to invest $550 billion in the US.
"I want to thank Japan for making such a massive investment in America," Trump said aboard the USS George Washington in Yokosuka. "They are a major investor in our country, and we welcome that." He also noted that Takaichi informed him of Toyota’s plans to build additional US auto plants exceeding $10 billion in scale—though Toyota was not listed in METI’s fact sheet.
US Commerce Secretary Howard Lutnick later met with executives from several Japanese firms on the list, hinting at further investment announcements. "You’re at the starting line. This is the foundation—it’s incredibly exciting," Lutnick remarked, emphasizing the unprecedented concentration of industrial power.
Energy-related projects dominate the investment blueprint. Westinghouse’s AP1000 nuclear reactors and small modular reactors (SMRs), valued at up to $100 billion, involve suppliers like Mitsubishi Heavy Industries and US power operators. Another SMR project linked to Hitachi GE Vernova is similarly estimated at $100 billion.
Analysts suggest the US will ultimately decide which projects receive funding, though Japan retains some influence. However, Trump retains the option to reinstate higher tariffs if Japan declines to finance his preferred projects.
The $550 billion fund, a cornerstone of the July US-Japan trade deal, aims to boost economic growth and national security by investing in semiconductors, pharmaceuticals, metals, critical minerals, shipbuilding, energy, AI, and quantum computing. Under the agreement, Trump slashed US tariffs on Japanese autos from 27.5% to 15%, extending similar rates to other key exports.
**A Major Boost for US Markets?** METI’s fact sheet highlights projects from energy to AI, with SoftBank, Westinghouse, and Toshiba leading investments from $350 million to $100 billion (e.g., AP1000/SMRs). This signals substantial capital expenditure, particularly benefiting US nuclear/power equipment, AI infrastructure, and semiconductor supply chains.
The US will establish an investment committee to oversee project selection, retaining tariff leverage if Japan withdraws funding. Accelerated federal permits and land/utility access could speed up AI and chip manufacturing projects.
Economically, Japan’s investment may revitalize sluggish US manufacturing capacity and non-farm employment, aligning with Trump’s "America First" policy by incentivizing domestic procurement.
The $550 billion is expected to focus on nuclear/energy infrastructure, semiconductor manufacturing, critical minerals/battery materials, and broader AI infrastructure—likely driving production expansion and stock valuations in these sectors.
**Investment Structure** Per disclosed memorandums, each project will use a Special Purpose Vehicle (SPV), initially splitting costs 50/50 until a "deemed allocation" threshold is met, then shifting to a 90% (US) / 10% (Japan) profit-sharing model—a more phased approach than the White House’s earlier "90% to America" rhetoric.