Japan’s AI agent boom

Japan’s second largest city, Osaka, has begun testing autonomous AI agents in local government in an attempt to ease the country’s shrinking work force.

Osaka Prefecture has launched a public-private consortium that will experiment with AI Agents designed to provide clerical support and multilingual services.

The prefecture will pool expertise from a consortium, which includes Google Cloud Japan, telecom provider NTT West, Microsoft Japan, and Osaka Metropolitan University. The trial will assess whether AI can streamline administrative processes accurately and independently under predefined rules.

Osaka governor Hirofumi Yoshimura said the initiative moves to create “a society that is more convenient and prosperous.” In Silicon Valley AI agents are a technology to be scaled, but in Japan, the main concern is minimizing chaos through standardization.

Japan’s AI agent boom

Osaka prefecture’s new consortium follows a host of major household companies that are starting to embrace AI agents. Itochu Corporation, one of Japan’s largest food and drink manufacturers, and automaker Mazda are testing AI agents in autonomous payments, internal audits, as well as customer service.

Japanese software testing firm SHIFT and data analytics firm TDSE are also exploring  a payment ecosystem powered by autonomous AI agents. TDSE said its proof of concept seeks to initiate transactions, verify requirements, and coordinate with other systems to execute settlement without direct human intervention.

In fact, a recent industry survey found that 35% of Japanese companies have already adopted AI agents in some form and 44% plan to adopt them.

Japan’s corporate ambitions to develop AI agents is a largely reactionary and ‘defensive’ measure. It represents an economic acceptance of autonomous AI as a productivity tool amid a labor shortage, rural depopulation, and waning tolerance towards foreigners.

Innovation hotbed? Think again.

Japan isn’t trying to win a race for the biggest AI agent models. It’s taking a slower, deliberate, and more risk averse path. Tokyo-based provider of accounting software, Rakus isn’t convinced that AI can be left to do everything. 

Chatbots have emerged as the latest sales and customer facing tools in big tech and fintech. But the current capabilities of back-end chatbots hasn’t made life easier, according to Shinichiro Motomatsu, the company’s director and chief AI officer.

“If you were to try and handle expense reimbursements entirely through a chatbot workflow it would probably turn into a hellish experience,” said Motomatsu.

Their main worry is adopting a system that increases operational burdens on teams which are already at capacity.

Accountability grey zone

Japan wants to implement AI agents safely inside real organizations. The focus is on minimizing mistakes so as not to undermine trust.

According to Rakus’s chief AI office, Japan’s approach is not a failure of imagination but a deliberate response to how organizations really work.

“At each stage you need to evaluate whether the technology is genuinely helping users. If it isn’t, we shouldn’t hesitate to pull back,’” said Motomatsu.

Motomatsu said that AI agents should be treated as goal driven tools as opposed to a stand alone technological goal.

He believes it’s far more realistic for AI agents to serve as partially autonomous actors since accountability is a major grey area.

“If something goes wrong, you can’t just simply explain that AI decided it,” said Motomatsu. “Someone in the organization must be able to take responsibility for the outcome.”

Human-centric AI agents

Rakus’s chief AI officer stresses that AI doesn’t eliminate the need for well designed workflows as well as checks and balances. He argues their real value lies in playing a supporting role, rather than replacing structures that make organizations function.

“AI agents are not magic. They won’t eliminate the need for rules, processes, or human judgement,” said Motomatsu.

Osaka prefecture’s push to adopt AI agents reflects a governance first approach taking roots across corporate Japan. It plans to formulate practical guidelines that can be replicated by local governments across Japan by the end of fiscal 2026.

The prefecture aims to produce a framework that outlines clear rules regarding what AI agents are allowed to do, how their actions are monitored, and when human intervention is needed.

There are also gains beyond efficiency. Hitachi’s chief AI transformation officer, Jun Yoshida suggests that AI agents can take over repetitive tasks making way for cognitive space.

“If AI simply allows us to do even more work at a faster pace, that’s not necessarily progress,” he said. “What matters is how people use the space that opens up.”

He describes this as “white space” which he argues can become a source of innovation, reflection and decision making.

Japan is designing AI agents that address corporate problems, not showcase technological development. In a business culture that traditionally prioritize control and standardization, companies are wary of systems that obscure human judgment in mission-critical processes.

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