Japan plans to set the number of foreign workers accepted under its main labor migration programs at about 1.23 million through fiscal 2028, under a sweeping overhaul aimed at easing labor shortages.

The proposed figure, presented at an expert panel meeting on Tuesday, combines the existing Specified Skilled Worker (SSW) Type 1 program with a new residence status known as ※Employment for Skill Development§ (ESD), which will replace the Technical Intern Training Program in 2027.

Under the plan, the number of people allowed to be under the SSW Type 1 visa specifically would be capped at 805,700 workers, down from the current 820,000 introduced in March last year, while the new training-based status would be newly capped at 426,200 to make a combined total of 1.23 million.

The caps were calculated by estimating labor shortages at the end of fiscal 2028 and subtracting expected gains from productivity improvements and domestic recruitment, such as the increased participation of women and older workers.

Officials said that digitalization and automation would reduce labor demand in some sectors, contributing to the decision to lower the SSW Type 1 cap.

The new system is scheduled to begin accepting workers in March 2027, meaning it will operate under a two-year ceiling through the end of fiscal 2028.

Only sectors where shortages remain severe after those adjustments will be permitted to accept foreign labor.

They aim to secure Cabinet approval in or around January.

The SSW framework will also expand to cover 19 industrial fields with the addition of logistics warehouses, linen supply and resource recycling, while job categories will be broadened in areas such as manufacturing and transportation.

Under a basic policy adopted in March, the government must present foreign worker acceptance figures in five-year blocks and demonstrate they are proportionate to labor demand. For existing SSW fields, the revised caps apply within the current five-year period ending in fiscal 2028, while newly added sectors will be covered from fiscal 2026.

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