Some experts question the need for taxpayers to pump money into private companies. But Nobuyuki Ota, chief executive of Cool Japan Fund, said it made sense for the government-dominated effort to pick winners among companies keen to expand abroad.
"A state-backed fund can do what private investors cannot," Ota, a former fashion executive who brought Issey Miyake designs to the world, told Reuters.
"Private investors sell their assets once their investment targets becomes profitable. We can be a long-term investor because it takes time for those small companies to grow."
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As disputes with neighbors like China and South Korea simmer, Abe's government is keen to exploit chances to project Japan's popular cultural wares.
The expected adoption soon by UNESCO of Japanese cuisine - "washoku" - as an "Intangible Cultural Heritage" is the latest example of Japan's "soft power" push.
The Cool Japan Fund starts with 37.5 billion yen ($371 million)- 30 billion yen from the government and 7.5 billion yen from 15 companies, such as airline ANA Holdings and advertising giant Dentsu.
The fund will swell to 60 billion yen by March and eventually reach 90 billion yen by March 2015, said Yoshiaki Akamatsu, an official at the Ministry of Economy, Trade and Industry (METI), which is overseeing the project.
But if these businesses getting public support are worthy, the question arises, why do they need public backing?
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Such "public-private" funds are in fact public and they face a conflict between policy goals of promoting chosen firms and the need to maximize returns, said private-equity consultant Joji Takeuchi.
"The fund idea is created by the government, most of the money is provided by the government, the government raises funds from the private sector and the government assembles the fund managers," said Takeuchi, chief executive of Brightrust PE Japan.
"Investments from the private investors are very small and are nothing more than a token of their support for the government initiative."
Abe's government, which has pumped more than $3 billion into state-linked funds investing in Japanese companies, expects annual returns of 7 percent to 9 percent from the Cool Japan Fund, said a person directly involved in the project.
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But Takeuchi said by email that returns in the high single digits would not be considered sufficient, "considering the complications and potential conflict inherent in the public-private structure".
The fund's remit, according to its website, runs from anime and other comics to movies, TV programs, games, fashion and local products such as lacquer-ware, beauty products and food.
Its aims are broader than investor returns.
"It is difficult to preserve local culture without injecting government money," Ota said. "Local manufacturers are shrinking, and many young people leave for bigger cities. Once the older generations die, there will be no one who would take over that. I wonder what will happen to Japan 100 years from now."
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Akamatsu of METI's Creative Industries Division, said the Cool Fund's mission "is to invest in companies that are making their utmost efforts and would succeed overseas with some cash injection".