TSMC Effect Spreads: Kumamoto Tax Revenue Rises 8.6%, Ranking First in Japan

According to a survey by Nikkei, 29 prefectures in Japan will see record-high local tax revenues in fiscal 2026. Kumamoto Prefecture ranked first with an 8.6% increase compared to the initial 2025 budget, showing the expanding economic impact of TSMC's investment. This growth is driven by the concentration of semiconductor-related industries. Higo Bank, a major financial institution in Kumamoto, raised wages by 6% from April due to strong demand for loans and increased interest income. In addition to industrial investment, tourism also brought significant benefits. Nara Prefecture ranked second with an 8.4% increase, thanks to the opening of several luxury hotels. Okinawa also hit a record high for the 12th consecutive year due to population and tourism growth. However, risks remain, such as geopolitical instability in the Middle East which could affect corporate earnings. Professor Shigemitsu Sato of Hitotsubashi University emphasized the importance of long-term economic blueprints to ensure fiscal stability beyond single-industry reliance.