During his recent visit to London, Prime Minister Fumio Kishida delivered a speech that surprised many in the finance sector.

Calling it the “Doubling Asset-based Incomes Plan," Kishida introduced one of his key economic policies for stimulating Japan’s growth by encouraging Japanese people to shift their savings into risk assets.

“In order to double the country’s income from asset investments, I will promote a bold and fundamental shift from savings to investment,” Kishida said.

The prime minister delivered his speech in the City of London, a financial hub for both Britain and the world. Considering the cautious stance investors have taken toward Kishida’s economic policies, the location was likely his way of appearing more market-focused.

Investors haven’t necessarily seen him that way. For example, during the ruling Liberal Democratic Party leadership campaign last September, Kishida pledged to review the capital gains and dividends tax, hinting at a possible hike to correct widening inequality between the rich and poor.

The policy was widely unpopular among market participants, and the benchmark 225-issue Nikkei average plunged in the days just before and after the launch of the Kishida administration in October, marking an eight-day losing streak for the first time in 12 years.

Kishida then backtracked on the pledge by saying that he had no immediate plans to touch the capital gains and dividends tax. But some policy ideas he has shared in the past seven months, such as regulating buybacks and relaxing quarterly disclosure requirements for companies, have alarmed many in the financial sector.

In an apparent effort to reassure investors, Kishida used part of his London speech to lay out his background in banking and emphasize that he has been working on economic policies ever since he first became a lawmaker.

“Based on my personal experience, I would argue that I am the most knowledgeable recent Japanese prime minister when it comes to the realities of the economy and finance,” Kishida said.

Some economists have said that the announcement of the Doubling Asset-based Incomes Plan came as an abrupt surprise.

According to Keiji Kanda, senior economist at the Daiwa Institute of Research, Kishida has not completely walked back the idea of hiking the capital gains and dividends tax, so many market watchers are still taking a wait-and-see approach to his policies.

“(Kishida) probably wanted to make it very clear that his first priority is to boost people’s assets, rather than collecting from them,” Kanda said.

But when it comes to increasing asset-based incomes, how is Kishida planning to do it?

The prime minister revealed few details in the speech, instead saying he intends to expand the tax-free investing program known as the Nippon Individual Savings Account (NISA), and implement some other new strategies.

Tax incentives can be an effective conduit for investment, but it is more important for companies to improve their competitiveness and earnings in order to boost stock performance, Kanda said.

“The fundamental problem is that Japanese stocks have not performed well,” he added.

In the past two decades or so, the Japanese stock market has not shown steady growth.

The Topix index, which covers all listed firms in the top section of the Tokyo Stock Exchange, has barely grown. Conversely, major indexes in the U.S., such as the S&P 500 and the Dow Jones Industrial Average, have demonstrated an overall upward trend.

In fact, this is not the first time the government has tried to stimulate investment among the public: The slogan “From savings to investment” has been promoted since 2001.

But many Japanese people apparently don’t see investment as an effective instrument to build wealth.

According to data from the Bank of Japan, financial assets held by Japanese households totaled over ¥2 quadrillion as of December, with 54% languishing in basic savings accounts or cash. During the same period, bonds, stocks and mutual funds accounted for a mere 16%.

Kishida said Japan’s household financial assets have experienced an increase of 40% over the past decade, while household assets in the U.K. have seen a 130% jump. In the U.S., they’ve tripled.

According to Kanda, one reason that many in Japan have been indifferent toward investing in risk assets is increasing uncertainty about the future, due to the country's sluggish wage growth and slumping economy.

Without economic growth and wage hikes to clear away future uncertainties, people will be wary of risk assets, he said.

Under such circumstances, people generally become reluctant to invest in stocks, since “they are unsure if they can really sell them at a profit. Thus, they play it safe and put their money in savings accounts,” he said.