Japan OKs record defense budget aimed at deterring China

FLAMING SWORD In this photo provided by the Australian Department of Defense, a Japanese Type 12 surface-to-ship missile is launched at Australia's Beecroft Weapons Range on July 22 as part of Talisman Sabre biennial joint military exercises. —AP

TOKYO—Japan’s Cabinet on Friday approved a record defense budget plan exceeding $58 billion for the coming year, aiming to fortify its strike-back capability and coastal defense with cruise missiles and unmanned arsenals as tensions rise in the region.

The defense budget forms part of the record 122.31-trillion-yen ($783 billion) draft initial budget for fiscal 2026, reflecting Prime Minister Sanae Takaichi’s expansionary fiscal stance to spur growth and boost defense spending, despite concerns over public finances.

The draft defense budget for fiscal year 2026 beginning April is up 9.4 percent from 2025 and marks the fourth year of Japan’s ongoing five-year program to double annual arms spending to 2 percent of gross domestic product.

The increase comes as Japan faces elevated tension from China.

Takaichi said in November 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.

Her government, under US pressure for a military increase, pledged to achieve the 2-percent target by March, two years earlier than planned. Japan also plans to revise the ongoing security and defense policy by December 2026 to further strengthen its military.

‘Standoff’ capability

The new budget plan allocates more than $6.2 billion to bolster Japan’s “standoff” missile capability. It includes a $1.13-billion purchase of domestically developed and upgraded Type 12 surface-to-ship missiles with a range of about 1,000 kilometers.

The first batch of the Type 12 missiles will be deployed in Japan’s southwestern Kumamoto prefecture by March, a year earlier than planned, as Japan accelerates its missile buildup in the region.

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 United States.

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 $640 million to deploy “massive” unmanned air, sea-surface and underwater drones for surveillace and defense under a system called “SHIELD” planned for March 2028, defense ministry officials said.

For speedier deployment, Japan initially plans to rely mainly on imports, possibly from Turkey or Israel.

The budget announcement comes as Japan’s row with China escalate following Takaichi’s remark in November that Japanese military could get involved if China were to take action against Taiwan, the self-governing island that Beijing claims as its own.

The disagreement escalated this month when Chinese aircraft carrier drills near southwestern Japan prompted Tokyo to protest when Chinese aircraft locked their radar on Japanese aircraft, which is considered possible preparation for firing missiles.

The Defense Ministry, already been 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.

Next-generation fighter

Two Chinese aircraft carriers were spotted in June almost simultaneously operating near southern Japanese island of Iwo Jima for the first time, fueling Tokyo’s concern about Beijing’s rapidly expanding military activity far beyond its borders and areas around the disputed East China Sea islands.

Japan is pushing to strengthen its largely domestic defense 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 $1 billion to jointly develop a next-generation fighter jet with Britain and Italy for deployment in 2035. There also are plans for research and development of AI-operated 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 Mogami-class frigate to replace its fleet of 11 Anzac-class ships.

Japan’s budget allocates nearly $64 million to support industry base and arms sales.

The budget plan requires parliamentary approval by March to be implemented as part of a $784-billion national budget bill.

The five-year defense buildup program would bring Japan’s annual spending to around $64 billion, making it the world’s third-largest spender after the United States and China. Japan will clear the 2-percent target by March as promised, the Finance Ministry said.

Takaichi’s government plans to fund its growing military spending by raising corporate and tobacco taxes and recently adopted a plan for income tax increase beginning 2027. Prospects for future growth at a higher percentage of GDP is unclear.