KUALA LUMPUR - Japan aims to accept about 1.23 million foreign workers through its main labour migration programmes by fiscal 2028 as part of major reforms to address workforce shortages.

The proposed figure was presented at an expert panel meeting, last Tuesday and combines the current Specified Skilled Worker (SSW) Type 1 scheme with a new residence status called Employment for Skill Development (ESD).

The ESD programme will replace the Technical Intern Training Programme starting in 2027.

Under the plan, the number of workers under the SSW Type 1 visa will be capped at 805,700, slightly lower than the current limit of 820,000 set in March last year.

The new ESD status will have a cap of 426,200 workers, bringing the total combined limit to about 1.23 million.

Officials said the caps were based on estimated labour shortages by the end of fiscal 2028, after factoring in productivity gains and more local hiring such as women and older workers.

They added that increased digitalisation and automation in some industries would reduce labour needs, leading to a lower SSW Type 1 cap.

The new system is expected to start accepting workers in March 2027 and will run under a two-year cap until the end of fiscal 2028.

Only sectors that continue to face serious labour shortages after these adjustments will be allowed to hire foreign workers.

The government aims to secure Cabinet approval for the plan around January.

The SSW system will be expanded to cover 19 industries, with new additions including logistics warehouses, linen supply and resource recycling.

Job categories will also be widened in sectors such as manufacturing and transportation.

Under a policy adopted in March, the government must set foreign worker intake figures in five-year periods and ensure they match labour demand.

For existing SSW sectors, the revised caps will apply until fiscal 2028, while newly added sectors will be included starting fiscal 2026.

As of the end of June, government data showed Japan had 333,123 SSW Type 1 workers and 449,432 technical intern trainees.