Japan's 'Cool Japan' fund faces abolition after racking up 38.3 billion yen in losses

By Jung Yoon-hee, The Herald Business

Japan's "Cool Japan" initiative, modeled on South Korea's hallyu success, is facing an existential crisis.

The Japanese government is considering abolishing the Cool Japan fund, a public-private vehicle it created to promote the country's cultural exports abroad, according to Kyodo News and Yonhap News Agency.

The government plans to review whether to dissolve or merge the Cool Japan fund, which channels money to domestic companies seeking to expand Japanese culture overseas, Kyodo News reported. The review was prompted by mounting losses stemming from poor earnings at startups that received funding from the vehicle.

Cool Japan was a signature project of former Prime Minister Shinzo Abe. The fund was established in 2013 to promote Japanese culture — including food and animation — in overseas markets, and is widely regarded as having been modeled on South Korea's hallyu industry.

The fund was designed to use non-recoverable government capital to attract private investment, but it failed to turn a profit from the outset.

Cumulative losses reached 38.3 billion yen (about 360 billion won, or approximately $236 million) as of fiscal year 2024 (April 2024 through March 2025).

The government's total capital contribution to the Cool Japan fund stood at 140.6 billion yen (about 1.3 trillion won) as of March, and questions have been raised over whether that public money can be recovered if the fund is dissolved, Kyodo News said.