Japan Plans ¥10.5 Trillion Physical AI Investment, Sending Robotics Stocks Surging

“Physical AI” allows AI to directly control robots and equipment performing tasks in real-world environments. Facing a declining birthrate, an aging population and structural labor shortages, Japan’s government has designated the technology a key industry. It aims to combine the country’s strengths in manufacturing data, industrial robots and components to expand applications including factory automation, autonomous delivery, caregiving and disaster response.

Japan’s government unveiled a growth strategy on June 24, 2026, calling for ¥10.5 trillion in public- and private-sector investment in physical AI by fiscal 2040. On June 30, the Ministry of Economy, Trade and Industry separately proposed deploying 10 million AI robots across 18 industries. The policy news sent Fanuc up 6.09%, Yaskawa Electric up 7.28% and Harmonic Drive Systems up 11.45% on June 22.