This paper discusses recent issues related to Japan’s official development assistance (ODA) and possible future trends for the provision of such assistance. While Japan remains the world’s largest donor nation, given its prolonged economic stagnation and mounting public sector debt, the Japanese government is under increasing public pressure to reduce ODA budgets and to use ODA in more explicit pursuit of Japan’s own economic and political interests. Internationally, Japan continues to attract criticism for its emphasis on infrastructure-related projects and for its restrained willingness to participate in multilateral partnerships. This paper argues that Japan can meet these domestic and international challenges by developing a coherent national strategy for ODA, broadly designed to enhance effectiveness, accountability and transparency