TOKYO (AP) — Japan’s cabinet on Friday approved a record defense budget plan of more than 9 trillion yen ($58 billion) for next year that aims to bolster its strike-back capability and coastal defenses with cruise missiles and unmanned arsenals as tensions rise in the region.
The draft budget for fiscal year 2026, as of April, is up 9.4 percent from 2025 and marks the fourth year of Japan’s five-year program to double annual arms spending to 2 percent of gross domestic product.
The increase comes as Japan faces heightened tensions from China. Japanese Prime Minister Sanae Takaichi said in November that his country’s military could get involved if China took action against Taiwan, the autonomous island that Beijing says must be under its rule.
Takaichi’s government, under pressure from the US for a military increase, has pledged to reach the 2 percent target by March, two years earlier than planned. Japan also plans to review its ongoing security and defense policy by December 2026 to further strengthen its military.
Missiles and drones will help defend the southwestern island
Japan has strengthened its offensive capability with long-range missiles to strike enemy targets from afar, a major break with its post-World War II principle of limiting the use of force to self-defense.
The current security strategy, adopted in 2022, names China as the country’s biggest strategic challenge and calls for a more offensive role for the Japan Self-Defense Force in its security alliance with the US.
The new budget plan allocates more than ¥970 billion ($6.2 billion) to bolster Japan’s “defeat” missile capability. It includes a ¥177 billion ($1.13 billion) purchase of domestically developed and upgraded Type 12 surface-to-ship missiles with a range of about 1,000 kilometers (620 miles).
The first batch of Type 12 missiles will be deployed in southwestern Japan’s Kumamoto prefecture by March, a year earlier than planned, as Japan accelerates its missile build-up in the region.
In part because of Japan’s aging and shrinking population and its struggle with an undermanned military, the government sees unmanned weapons as essential.
To defend its coasts, Japan will spend 100 billion yen ($640 million) to deploy “massive” unmanned aerial, sea surface and underwater drones for surveillance and defense under a system called “SHIELD” planned for March 2028, defense ministry officials said.
For faster deployment, Japan initially plans to rely mainly on imports, possibly from Turkey or Israel.
Tension with China is rising
The budget announcement comes as tensions between Japan and China escalate following Takaichi’s remark in November that the Japanese military could get involved if China took action against Taiwan, the autonomous island that Beijing claims as its own.
The disagreement escalated this month when exercises with a Chinese aircraft carrier near southwest Japan prompted Tokyo to protest when Chinese aircraft jammed their radar on Japanese aircraft in what is seen as possible preparation to fire missiles.
The Ministry of Defense, already alarmed by the rapid expansion of China’s operations in the Pacific, will open a new office dedicated to studying the operations, equipment and other needs for Japan to deal with China’s activity in the Pacific.
Two Chinese aircraft carriers were spotted in June operating almost simultaneously near the southern Japanese island of Iwo Jima for the first time, fueling Tokyo’s concern that Beijing’s military activity is rapidly expanding far beyond its borders and the areas around disputed islands in the East China Sea.
Japan plans joint development of frigates and aircraft
Japan is pushing to strengthen its largely domestic defense industry by participating in joint development with friendly nations and promoting foreign sales after sharply reducing arms export restrictions in recent years.
By 2026, Japan plans to spend more than ¥160 billion ($1 billion) to jointly develop a state-of-the-art fighter jet with Britain and Italy for deployment in 2035. There are also plans to research and develop AI-operated drones designed to fly the plane.
In a major boost to the country’s defense industry, Australia selected Mitsubishi Heavy Industries in August to upgrade the Mogami-class frigate to replace its fleet of 11 ANZAC-class ships.
Japan’s budget allocates nearly 10 billion yen ($64 million) to support the industry base and arms sales.
Targets met, but future funding uncertain
The budget plan needs parliamentary approval by March to be implemented as part of a 122.3 trillion yen ($784 billion) national budget bill.
The five-year defense build-up program would push Japan’s annual spending to about 10 trillion yen ($64 billion), making it the world’s third-biggest spender after the US and China. Japan will exceed the 2 percent target by March as promised, the Finance Ministry said.
Takaichi’s government plans to finance its rising military spending by raising corporate and tobacco taxes, and recently adopted a plan to raise income tax starting in 2027. Prospects for future growth to a higher percentage of GDP are unclear.