The planned increase represents a year-on-year rise of around 9.4 per cent and marks the fourth consecutive year of rapid growth in defence expenditure. Tokyo aims to reach defence spending equivalent to 2 per cent of GDP by fiscal year 2027, possibly earlier, although the budget must still be approved by parliament by March 2026.
The rise in spending is driven by geopolitical changes that are seen as potential threats to Japan, with the policy of the People’s Republic of China identified as the main concern. In November, Prime Minister Sanae Takaichi stated that the Japan Self-Defence Forces could be involved in defending Taiwan if Beijing were to attack the island.
Higher funding is intended to strengthen Japan’s military capabilities, particularly long-range strike capacity, with more than 10 per cent of the 2026 defence budget allocated to this area. Key programmes include Type 12 cruise missiles with a range of up to 1,000 kilometres, the SHIELD unmanned surveillance network, the Global Combat Air Programme with the UK and Italy, and further investment in the Maritime Self-Defence Force, while the spending increase may require higher taxes such as tobacco excise or income tax.
