Japan weighs lower defense spending plan amid funding constraints
Proposed purchases of some missiles and aircraft, including F-35 fighters, could be reduced by as much as half, people familiar with the discussions said.
Japan’s Finance Ministry has proposed a defense budget of ¥50 trillion to ¥60 trillion for a five-year period beginning in April 2027, according to four people familiar with the proposal. Fiscal pressures are threatening to limit the military expansion sought by Prime Minister Sanae Takaichi’s government.
The proposed range is above the existing five-year allocation of ¥43 trillion, but below the ¥80 trillion sought by some defense officials and lawmakers from the ruling Liberal Democratic Party. The lower spending level would leave Japan below its defense spending target of 2% of gross domestic product.
Contractors have been warned to expect substantial reductions in orders, the four people said. Planned purchases of certain missiles and aircraft, including American-made F-35 stealth fighters, could be cut by as much as half. The people requested anonymity because they lacked authorization to discuss the matter publicly.
Three of the people said ministry officials see difficulties financing a larger increase while meeting Takaichi’s pledges to support economic growth and reduce the sales tax on food. That tax reduction would create a yearly revenue gap of ¥4.3 trillion, requiring replacement funding potentially drawn from foreign exchange reserves.
Takaichi’s government says the military buildup is necessary to counter China. An unnamed ruling party official involved in the discussions rejected spending in the ¥50 trillion range as inadequate to develop the capabilities needed to deter a contingency.
Finance Minister Satsuki Katayama declined to address the proposal’s specifics, saying a security and defense advisory panel had not discussed that degree of detail. The Defense Ministry did not immediately provide a response to a request for comment.
