Abstract: This article starts from the relationship between watershed space and resident space, which transforms from harmonious to conflicting. Firstly, it expounds how Japan promotes the re-balanced development of the two spaces under the concept of 'life circle' planning. The Japanese government believes that it is important to optimize the allocation and flow mode of resources, transforming from the dominant pattern of external circulation to the dual pattern of internal and external circulation, and building different kinds of life circles is one of the most effective ways to realize it. Then this article takes Yoneshirogawa watershed in Akita, Japan as the research object. Focusing on the functional layout, transportation system and industrial development of the life circle planning in Yoneshirogawa watershed, as well as the characteristic green financial policy, this article analyzes how it is combined with the watershed space and realizes balanced development. It is hoped to provide experience to achieve both ecological protection and high-quality development in Chinese watershed areas.