The Cool Japan government fund is facing the axe or a possible merger following huge reported losses totaling 54 billion yen.

According to the Asahi Shimbun, one government source stated that abolition is now "inevitable." In addition to the aforementioned losses, sales for the financial year 2025 were reported at a measly 4.4 billion, while net income came in at 15.6 billion in the red. One of the key objectives for 2025 was to reduce Cool Japan's net losses to 42.6 billion, but it has grown instead.

In terms of why the fund is performing so poorly, disappointing returns from an investment fund of 14 billion are given as the main cause. For example, the Yamagata-based fabric manufacturer Spiber Inc. received 3 billion in 2021 and is now scrambling to solve a 30 billion insolvency. One insider remarked that "We tried to do too much, too soon."

Nevertheless, Cool Japan has long been the source of much controversy and criticism. Launched in 2010 by the Ministry of Economy, Trade and Industry as a way to project soft power overseas through cultural means, its initiatives have proved both expensive and ineffective. Perhaps most crucially, despite being targeted at foreigners, very few people born outside of Japan have had any degree of influence over the decision-making process.

If the fund does get scrapped, few will mourn.