Kishida unveiled a 17 trillion yen ($174 billion) stimulus program in November to help low-income households hit by inflation with one-off tax cuts.

“The economy, the economy, the economy. I will focus my attention on the economy more than anything else,” the prime minister said. “Pay hikes are not outpacing inflation. This is the biggest challenge facing us.”

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In his pitch to voters, Kishida said his country could not afford to miss the opportunity to transition from a “cold temperature economy”, based on cutting costs, to a “suitable temperature economy”, based on lifting investment.

“Japan’s economy has cut down on investment in people and wages, as well as even investment in the future through capital investment and research and development investment, resulting in stagnant consumption and investment,” he said.

But the measures have failed to generate much popular support for the leader who is also facing multiple scandals over donation funding and his Liberal Democratic Party’s links to a religious cult, the Unification Church.

The latest Nikkei-TV Tokyo survey in January had his cabinet’s approval rating at 27 per cent – just one percentage point above the record low of 26 per cent in December.

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Analysts had pinned some hopes of the spending bouncing back in a post-COVID tourism surge, but other services are struggling to stay competitive. Japan’s digital innovation has also stalled. After becoming one of the world’s leading innovators in the 20th century, it is increasingly reliant on overseas digital providers.

The IMD World Digital Competitiveness Ranking found Japan’s position had declined from 23rd of 64 countries in 2019 to 32nd last year.

A Japan analyst at Oxford Economics, Shigeto Nagai, said another constraint was a shortage of highly skilled IT workers, who are essential to transforming businesses to become less labour-intensive.

“The serious shortage of IT workers in Japan is ongoing, resulting in a rising gap between ambitious software investment plans and actual execution,” he said.

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