Japan is on the verge of enhancing its defense capabilities through a fresh economic and fiscal policy framework, poised to pave the way for a substantial boost in military expenditure in the forthcoming years. This initiative is encapsulated in the government’s annual Basic Policy on Economic and Fiscal Management and Reform, with an anticipated approval later this month. The blueprint underscores Japan’s ambition to elevate its defense prowess within a five-year span, although it refrains from setting a new spending target. Instead, the policy is expected to highlight defense spending benchmarks set by prominent allies and partners.
The document is likely to reflect the increasing pressure from the United States for its allies to shoulder more of the security burden. It will further acknowledge the strategic steps taken by NATO members, South Korea, and Australia in formulating medium- to long-term defense spending plans. An included draft footnote will specify NATO’s objective to increase core defense spending to 3.5% of GDP by 2035, South Korea’s ambition to reach the same percentage as promptly as feasible, and Australia’s commitment to allocate 3% of GDP to defense by 2033.
Japan’s national security strategy, revamped in 2022, initially set a target to double defense spending from 1% to 2% of GDP within five years, a milestone that was achieved ahead of schedule in fiscal 2025. This proactive approach reflects Japan’s determination to enhance its military readiness in response to evolving security challenges.
As Japan navigates an increasingly complex regional security landscape, the updated policy is anticipated to lay the groundwork for revisions to its three pivotal national security documents later this year. The emphasis on defense spending is expected to remain central, as Tokyo seeks to fortify its position amid shifting geopolitical dynamics.