What's Happening?
Japan's Cabinet has approved a record defense budget exceeding 9 trillion yen ($58 billion) for fiscal 2026, marking a significant increase in military spending amid rising tensions with China. This budget is part of a five-year plan to double Japan's defense spending to 2%
of its GDP. The budget includes investments in cruise missiles and unmanned systems, reflecting a shift from Japan's post-World War II pacifist stance. The move is driven by concerns over China's military assertiveness, particularly regarding Taiwan. Japan plans to enhance its 'standoff' missile capabilities and invest in unmanned weapons systems to address personnel shortages. The budget also supports joint development projects with allies and aims to strengthen Japan's defense industry.
Why It's Important?
The increase in Japan's defense budget is significant as it represents a shift in the country's military posture, influenced by regional security dynamics. By enhancing its military capabilities, Japan aims to counter China's growing influence and assertiveness in the region. This move aligns with U.S. expectations for Japan to contribute more to regional security. The budget's focus on advanced weaponry and joint development projects with allies could bolster Japan's defense industry and technological capabilities. However, it may also escalate tensions with China, which views Japan's military expansion with suspicion. The budget's approval could have implications for regional stability and the balance of power in East Asia.
What's Next?
Japan's defense budget still requires parliamentary approval by March as part of a broader national budget package. If approved, Japan will become the world's third-largest military spender. The government plans to revise its national security and defense policies by December 2026 to further expand its military capabilities. To fund the expansion, Japan plans to raise corporate and tobacco taxes and has approved income tax increases starting in 2027. The focus on enhancing missile capabilities and unmanned systems suggests a strategic shift towards more proactive defense measures. The international community, particularly China, will likely monitor these developments closely.
