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The National Research Grid Initiative (NAREGI) is one of the major Japanese national IT projects currently being conducted. NAREGI will cover the period 2003-2007, and collaboration among industry, academia, and the government will play a key role in its success. The Center for Grid Research and Development has been established as a center for R&D of high-performance, scalable grid middleware technologies, which are aimed at enabling major computing centers to host grids over high-speed networks to provide a future computational infrastructure for scientific and engineering research in the 21st century. As an example of utilizing such grid computing technologies, the Center for Application Research and Development is conducting research on leading-edge, grid-enabled nanoscience and nanotechnology simulation applications, which will lead to the discovery and development of new materials and next-generation nanodevices. These two centers are collaborating to establish daily research use of a multiteraflop grid testbed infrastructure, which will be built to demonstrate the advantages of grid technologies for future applications in all areas of science and engineering.