Japan’s cabinet has approved a record defence budget plan exceeding 9 trillion yen ($85.9 billion) for the coming year, aiming to fortify its strike-back capability and coastal defence with cruise missiles and unmanned arsenals amid rising regional tensions.
The draft budget for fiscal 2026, beginning April, is up 9.4 per cent from 2025 and marks the fourth year of Japan’s ongoing five-year program to double annual arms spending to 2 per cent of gross domestic product.
The increase comes as Japan faces elevated tension from China.
In November, Japanese Prime Minister Sanae Takaichi said that her country’s military could get involved if China were to take action against Taiwan, the self-governing island that Beijing says must come under its rule.
Under US pressure for a military increase, Japan’s finance ministry pledged to achieve the 2 per cent target by March, two years earlier than planned.
Japan also plans to revise the ongoing security and defence policy by December 2026 to further strengthen its military.
Missiles and drones bolster coastal defence
The new budget plan allocates more than 970 billion yen ($9.2 billion) to bolster Japan’s “stand-off” missile capability.
It includes a 177 billion yen ($1.7 billion) purchase of domestically developed and upgraded Type-12 surface-to-ship missiles with a range of about 1,000 kilometres.
The first batch of the Type-12 missiles will be deployed in Japan’s south-western Kumamoto prefecture by March, a year earlier than planned, as Japan accelerates its missile build-up in the region.
Japan’s Type 12 surface-to-ship missiles were tested during Talisman Sabre, a joint military event that 19 countries, including Australia, participated in. (Australian Department of Defence via Reuters)
The current security strategy names China as the country’s biggest strategic challenge and calls for more offensive roles for Japan’s Self-Defense Force under its security alliance with the US.
In part due to Japan’s aging and declining population and its struggles with an understaffed military, the government believes unmanned weapons are essential.
To defend the coasts, Japan will spend 100 billion yen ($954 million) to deploy “massive” unmanned air, sea-surface and underwater drones for surveillance and defence under a system called “SHIELD” planned for March 2028, defence ministry officials said.
For speedier deployment, Japan initially plans to rely mainly on imports, possibly from Turkey or Israel.
Tension with China grows
The budget announcement comes as Japan’s row with China escalate following Ms Takaichi’s November remark that Japanese military could get involved if China were to take action against Taiwan.
The disagreement escalated this month when during drills near south-western Japan, Chinese aircraft locked their radar onto Japanese aircraft.
A radar-lock onto an aircraft is is considered a threatening act because it signals a potential missile attack.
The Defense Ministry, already alarmed by China’s rapid expansion of operations in the Pacific, will open a new office dedicated to studying operations, equipment and other necessities for Japan to deal with China’s Pacific activity.
Two Chinese aircraft carriers were spotted in June, almost simultaneously operating near the southern Japanese island of Iwo Jima for the first time, fuelling Tokyo’s concern about Beijing’s rapidly expanding military activity far beyond its borders and areas around the disputed East China Sea islands.
Japan jointly develops frigates and jets
Japan is pushing to strengthen its largely domestic defence industry by participating in joint development with friendly nations, and promoting foreign sales, after drastically easing arms export restrictions in recent years.
For 2026, Japan plans to spend more than 160 billion yen ($1.5 billion) to jointly develop a next-generation fighter jet with Britain and Italy for deployment in 2035.
There are plans for research and development of AI-operated drones designed to fly with the jet.
In a major boost to the country’s defence industry, Australia selected Mitsubishi Heavy Industries’s upgraded Mogami-class frigate in August to replace its fleet of 11 ANZAC-class ships.
Japan’s budget allocates nearly 10 billion yen ($95 million) to support industry base and arms sales.
Future funding uncertain
The budget plan requires parliamentary approval by March to be implemented as part of a 122.3 trillion yen ($1.17 trillion) national budget bill.
F-15 jets from Japan’s Air Self-Defence Force conducted joint military drills with the US earlier this month. (Defense Ministry of Japan via Reuters)
The five-year defence build-up program would bring Japan’s annual spending to around 10 trillion yen ($95 billion), making it the world’s third largest spender after the US and China.
Ms Takaichi’s government plans to fund its growing military spending by raising corporate and tobacco taxes and recently adopted a plan to increase income tax from 2027.
Prospects for future growth at a higher percentage of GDP is unclear.
AP
