- 14 Mar 2002
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Japan's parliament approved legislation on Friday to create a "second capital" that could keep the country functioning if a major disaster were to strike Tokyo, with Osaka emerging as the leading candidate. The plan marks an ambitious effort to reduce the political and economic concentration in the capital and spread key government functions elsewhere.
Even so, the flow of businesses has continued in the opposite direction. According to Teikoku Databank, 149 companies relocated to Osaka Prefecture in 2025, while 226 moved away, marking the 44th consecutive year of net outflows. Nearly a quarter of those companies (24%) relocated to Tokyo.
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The legislation calls for relocating some central government operations and offering tax incentives to help develop another major economic centre capable of competing with the Tokyo metropolitan area. Osaka has emerged as the leading candidate, although the city continues to lose companies to Tokyo, highlighting how difficult it may be to build a genuine alternative to the capital. Osaka Prefecture has Japan's second-largest economy after Tokyo, with a nominal gross domestic product of 43.12 trillion yen (US$266 billion) in fiscal 2022. It is home to Kansai International Airport and is a key stop on the Shinkansen network linking Tokyo with western and southern Japan.
Even so, the flow of businesses has continued in the opposite direction. According to Teikoku Databank, 149 companies relocated to Osaka Prefecture in 2025, while 226 moved away, marking the 44th consecutive year of net outflows. Nearly a quarter of those companies (24%) relocated to Tokyo.
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Japan approves plan to create second capital outside Tokyo
Osaka emerges as front-runner despite decades of corporate outflow