Japanese Prime Minister Shinzo Abe will ease regulations to allow for self-driving cars to be tested on public roads from 2017, with the aim of companies providing the service for the 2020 Olympics in Tokyo.
Mr Abe's decision, which came from a meeting with the head of Toyota and other executives, could be a boon for Japan's auto sector as they catch up with Google in the development of self-driving cars.
Promoting the technology could also spark innovation and capital expenditure, two elements that economists say are essential if Japan wants to break out of its decades-long cycle of bouncing in and out of recession.
Mr Abe said: "Investment holds the key to higher productivity, and based on this investment we can take the lead in sparking the next industrial revolution."
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