Jefferies told investors in a note this week that the new U.S.-Japan investment framework represents a "multi-year capital cycle in strategic sectors".
As the two countries seek to strengthen economic and defense ties through a $550 billion scheme targeting semiconductors, artificial intelligence, energy, shipbuilding, and critical minerals.
The structure, formalized in a memorandum of understanding in October, "aims to accelerate investments in strategic sectors through a credit assistance model," Jefferies analyst Aniket Shah wrote.
Shah explained that the initiative includes "20 pilot programs with a total value of more than $400 billion" and reflects Japan's desire to expand foreign direct investment in the United States.
The analyst identified four defining features: "Loans, not grants," while Japanese financing "is structured like loans, but unlike traditional loans, the yield remains at ~ 10% even after repayment of the principal amount."
According to domestic law, "all financing must be cost-effective and bring measurable benefits to Japanese companies."
The Advisory Committee, chaired by Secretary Lutnik, will coordinate work with the Ministries of Finance, Commerce and the U.S. Department of State, as well as with the Ministry of Finance, METI and MOFA of Japan.
Regarding priorities, "semiconductor projects require long—term capital and skilled labor, while AI infrastructure is rapidly scaling," Shah said. "Data center projects are now estimated at $10-20 billion with continuous reinvestment cycles every 5-7 years."
Energy capacity remains a "constraint", while Japanese manufacturers are well positioned for turbine and cooling solutions.
However, Jefferies warned that implementation faces "structural obstacles in the areas of labor, regulation and financing."
The labor shortage is "acute, with about 750,000 additional technical specialists required by 2030," while regulatory asymmetries and financing problems persist.
Overall, Jefferies believes that the program "favors companies related to semiconductors, AI infrastructure, and critical minerals," and firms that are able to overcome permit restrictions and labor restrictions are "best positioned for potential growth."