How Japan is regulating AI: Inside the AI Promotion Act

Japan has taken a distinct approach to artificial intelligence governance. Instead of heavy fines or rigid obligations, the country’s new AI Promotion Act sets national objectives, creates coordination structures, and relies on guidance, cooperation, and sector-specific laws to ensure responsible AI use. This innovation-first model reflects Japan’s belief that regulation should encourage AI adoption while managing risks through existing frameworks.

 

​Snapshot

• May 28, 2025: Japan’s National Diet (parliament) passed the AI Promotion Act (officially: Act on Promotion of Research and Development and Utilization of AI-Related Technologies).
• June 4, 2025: Most provisions of the Act took effect, setting national goals for AI R&D, infrastructure, and use.
• September 1, 2025: Chapters establishing the AI Strategy Headquarters and the AI Basic Plan entered into force.
• September 13, 2025: The AI Strategy Headquarters held its first meeting at the Prime Minister’s Office and began drafting the AI Basic Plan, structured around four pillars:
1. Using AI in sectors such as eldercare, nursing robots, and monitoring systems.
2. Creating AI by advancing domestic R&D, AI models, and infrastructure like data centers and communication networks.
3. Enhancing reliability by issuing guidelines under the Act, strengthening rights protections, and engaging in international governance.
4. Collaborating with AI by preparing for changes in employment, industry, and social systems.

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Core provisions of the AI Promotion Act

• The Act sets national objectives to promote safe and useful AI, encourage innovation, and secure critical infrastructure such as data centers, electricity, and communication networks.
• The Act establishes the AI Strategy Headquarters under the Prime Minister’s Office as the central coordinating body for AI policy.
• The AI Strategy Headquarters is responsible for drafting and updating the AI Basic Plan, which will guide Japan’s long-term AI strategy. At its first meeting on September 13, 2025, the Headquarters began this process and outlined four policy pillars for the plan:

 

• The Act adopts an innovation-first regulatory approach, emphasizing research funding, cooperation, and voluntary guidelines over hard restrictions.
• The Act does not impose direct fines or penalties. Instead, authorities may issue advice, request information, or publicly disclose non-compliance (“name and shame”).
• The Act relies on existing sector-specific laws—such as the Act on the Protection of Personal Information (APPI), Competition Law, Intellectual Property Law, and Product Safety Law—for binding enforcement where necessary.

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Governance and guidance

Japan’s AI governance model blends soft law with sectoral regulation. Key guidance comes from the AI Governance Guidelines for Business (v1.1, March 2025), issued by the Ministry of Economy, Trade and Industry (METI) and the Ministry of Internal Affairs and Communications (MIC). These guidelines provide practical expectations for companies, including:

• Conducting risk assessments and documenting safety, fairness, and bias testing.
• Ensuring transparency and explainability for users and stakeholders.
• Establishing monitoring and incident-handling mechanisms.
• Maintaining records throughout the AI system lifecycle.

 

Companies are expected to treat these guidelines as a “comply-or-explain” standard when interacting with customers, regulators, and international partners.

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How it fits with Japan’s existing rulebook

• Privacy and data protection: The Act on the Protection of Personal Information (APPI) remains the cornerstone of personal data regulation, requiring lawful collection, secure handling, and restrictions on data use.
• Intellectual property and content: The Copyright Act and the Unfair Competition Prevention Act govern the use of creative works and data for AI training and deployment.
• Sector-specific regulation: Industries such as finance, healthcare, and autonomous systems remain subject to their own strict supervisory regimes.
• International coordination: Japan aligns its approach with global frameworks, including the Hiroshima AI Process and international AI codes of conduct.

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What this means for businesses

For organizations developing or deploying AI in Japan, compliance means more than simply observing the Act. Businesses are expected to demonstrate responsible practices by following guidelines and integrating AI governance into operations. In practice, this means:

• Mapping AI systems, including their purpose, data inputs, and potential impacts.
• Running and documenting risk assessments covering bias, safety, and security.
• Providing transparency and clear user information about AI use and limitations.
• Keeping humans in the loop for decisions that significantly affect individuals.
• Monitoring AI systems post-deployment and maintaining logs and incident records.
• Incorporating AI-related clauses into vendor and supplier contracts.

 

Japan vs. the EU AI Act

Japan’s AI Promotion Act differs significantly from the EU AI Act:

• Japan: High-level statutory goals, Cabinet-level coordination, voluntary guidelines, and reputational pressure mechanisms.
• EU
  : Binding, risk-tiered obligations enforced with administrative fines and market surveillance.

For companies operating globally, Japan’s approach is lighter in direct regulatory burden but still requires robust internal governance to meet expectations and align with international norms.

 

Timeline

​The AI Promotion Act was passed by Japan’s National Diet on May 28, 2025, and most of its provisions entered into force on June 4, 2025. On September 1, 2025, the chapters establishing the AI Strategy Headquarters and the AI Basic Plan took effect, creating the institutional framework for national coordination. Just days later, on September 13, 2025, the Strategy Headquarters held its first meeting at the Prime Minister’s Office and began work on drafting the Basic Plan.

How to prepare for Japan’s AI rules

Companies should prepare by taking the following steps:

• Adopt an AI governance policy aligned with the METI/MIC guidelines and APPI.
• Develop risk logs and model cards documenting bias, safety, and reliability testing.
• Implement user notices and feedback channels to ensure transparency and accountability.
• Include AI-specific provisions in supplier and vendor contracts.
• Maintain a deployment dossier with lifecycle records as evidence of responsible AI management.
• Track updates to the AI Basic Plan and sectoral regulations through 2025–2026.

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Ready to turn compliance into a competitive advantage? Our experts can help you align with Japan’s AI regulation, build trust in your systems, and unlock innovation in the Japanese market. Contact us today for tailored guidance.