Japan's Cabinet OKs record defense budget that aims to deter China
[December 26, 2025]
By MARI YAMAGUCHI
TOKYO (AP) — Japan's Cabinet on Friday approved a record defense budget
plan exceeding 9 trillion yen ($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 draft budget for fiscal 2026 beginning 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 elevated 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 self-governing island that Beijing says must come under its rule.
Takaichi’s government, under U.S. pressure for a military increase,
pledged to achieve the 2% 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.
Missiles and drones will add to southwestern island defense
Japan has been bolstering its offensive capability with long-range
missiles to attack enemy targets from a distance, a major break from its
post-World War II principle limiting the use of force to own
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 Japan’s Self-Defense Force under its security alliance with the
U.S.
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
upgraded Type-12 surface-to-ship missiles with a range of about 1,000
kilometers (620 miles).
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.
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 100 billion yen ($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.
Tension with China grows
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.
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Type-12 surface-to-ship missile launchers are seen at the
inauguration ceremony of a missile regiment of the Japan Ground
Self-Defense Force in Uruma, Okinawa, southern Japan, on March 30,
2024. (Kyodo News via AP)
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.
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.
In Beijing, China's Foreign Ministry spokesperson Lin Jian said the
Takaichi government has “noticeably accelerated its pace of military
buildup and expansion" since taking office.
"Japan is deviating from the path of peaceful development it has
long claimed to uphold and is moving further and further in a
dangerous direction," Lin said.
Japan plans joint development of frigates and jets
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 160 billion yen ($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 10 billion yen ($64 million) to
support industry base and arms sales.
Meeting targets but future funding uncertain
The budget plan requires 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 would bring Japan's annual
spending to around 10 trillion yen ($64 billion), making it the
world’s third-largest spender after the U.S. and China. Japan will
clear the 2% 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.
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