TOKYO (AP) — Japan’s Cabinet on Friday approved a record defense budget plan to exceed 9 trillion yen ($58 billion) for the coming year, aiming to boost its strike-back capability and coastal defense with cruise missiles and unmanned armaments as tensions rise in the region.
The draft budget for fiscal 2026 that begins in April is up 9.4% from 2025 and marks the fourth year of Japan’s ongoing five-year program to double annual arms spending to 2% of gross domestic product.
The increase comes as Japan faces heightened tension from China. Japanese Prime Minister Sanae Takaichi said in November that her country’s military could get involved if China were to take action against Taiwan, the autonomous island that Beijing says it wants to fall under its rule.
Takaichi’s government, under pressure from the United States for a military increase, has promised to meet the 2% target by March, two years earlier than planned. Japan also plans to revise its current security and defense policy by December 2026 to further strengthen its military.
Missiles and drones will add to the defense of the southwestern island
Japan has been beefing up its offensive capability with long-range missiles to attack enemy targets from afar, a major break from its post-World War II principle of limiting the use of force in 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 under its security alliance with the United States.
The new budget plan allocates more than 970 billion yen ($6.2 billion) to bolster Japan’s “standoff” missile capability. It includes a 177 billion yen ($1.13 billion) purchase of domestically developed and improved 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 ahead of schedule, as Japan accelerates its missile buildup in the region.
Partly because of Japan’s aging and shrinking population and its struggles with an understaffed military, the government believes unmanned weapons are essential.
To defend its coasts, Japan will spend 100 billion yen ($640 million) to deploy “massive” aerial, surface and underwater unmanned 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.
Tensions with China grow
The budget announcement comes as Japan’s row with China escalates following Takaichi’s remark in November that the Japanese military could get involved if China were to take action against Taiwan, the autonomous island that Beijing claims as its own.
The disagreement escalated this month when Chinese aircraft carrier exercises near southwest Japan prompted Tokyo to protest when Chinese planes flashed their radar on Japanese planes, which is seen as a possible preparation to fire missiles.
The Ministry of Defense, already alarmed by China’s rapid expansion of operations in the Pacific, will open a new office dedicated to the study of operations, equipment and other needs for Japan to deal with China’s Pacific activity.
Two Chinese aircraft carriers were seen in June almost simultaneously operating near the southern Japanese island of Iwo Jima for the first time, raising Tokyo’s concerns about Beijing’s rapidly expanding military activity beyond its borders and the areas around disputed East China Sea islands.
Japan plans joint development of frigates and jets
Japan is pushing to boost 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.
For 2026, Japan plans to spend more than 160 billion yen ($1 billion) to jointly develop a next-generation fighter jet with Britain and Italy for deployment in 2035. There are also plans for research and development of AI-powered drones designed to fly with the jet.
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 almost 10 billion yen ($64 million) to support the industry base and arms sales.
The targets are met but the future funding is 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 buildup program brings Japan’s annual spending to about 10 trillion yen ($64 billion), making it the third largest spender in the world after the United States and China. Japan will lift the 2% target by March as promised, the Finance Ministry said.
The Takaichi government plans to finance its growing military spending by raising corporate and tobacco taxes and recently adopted a plan for an income tax increase starting in 2027. Prospects for future growth with a higher percentage of GDP are unclear.