Japan is expected to continue its trend of increasing its defence budget in the coming years, with North Korea's nuclear aspirations as well as China's assertive actions in the East and South China Seas driving regional uncertainties alongside other potential instabilities in the area.
A new report by consultancy GlobalData forecasts that Japan’s defence acquisition expenditure will reach a value of $83.4 billion by 2028, with a compound annual growth rate of 5.9 per cent during 2023-28.
GlobalData attributes the increase in the Japanese defence budget to “continued investment in significant defence modernisation and procurement plans”.
The report, titled “Japan Defense Market Size and Trends, Budget Allocation, Regulations, Key Acquisitions, Competitive Landscape and Forecast, 2023-28”, says that the “surge in defence expenditure over the past years has paved the way for substantial advancements in Japan's defence capabilities. In terms of investment, military fixed-wing aircraft is anticipated to be the largest sector followed by naval vessels, and missiles and missile defence systems.”
Japan’s increasing defence spending is reflected in the US ally’s own data, with its Defense Buildup Plan released in late 2022 anticipating that Tokyo will spend $432.5 billion between 2023 and 2027, with its expected defence budget to hit $94.82 billion in FY 2027.
The figures released by Japan is for its total defence budget, which includes its acquisitions, sustainment and costs associated with maintaining the US military presence on Japanese soil. It has also said that it will target spending 2 per cent of its GDP on defence by 2027.
“Japan is strengthening its surveillance capabilities in its surrounding seas, by investing in research and development (R&D) and procuring advanced naval platforms. Its steadfast efforts to modernise its air and naval capabilities reflect a forward-looking defense strategy aimed at addressing persistent regional challenges," notes Rouble Sharma, Aerospace & Defence Analyst at GlobalData.
"The country's commitment towards enhancing its defence capabilities and forging partnerships with key allies reinforces its position as a crucial player in maintaining regional security”.
Increasing its defence budget has seen Japan continue an ongoing campaign to improve the Self-Defense Forces. It is now the largest potential export operator of the Lockheed-Martin F-35 Lightning II Joint Strike Fighter, with plans to order 147 aircraft.
Japan is also ploughing a lot of effort into its indigenous defence industry, with ongoing programs to introduce a pair of Ballistic Missile Defence ships equipped with the Aegis combat systems, stand-off hypersonic and cruise missiles, improved Intelligence Surveillance and Reconnaissance capabilities, and upgrades to its Boeing F-15 fighters.
It has also broadened cooperation with other countries in defence, collaborating with Italy and the United Kingdom to develop a sixth-generation fighter aircraft.