TOKYO — The Japanese government is planning to set aside its biggest five-year defense budget from fiscal year 2023 to top 30 trillion yen ($264 billion) for the first time, Nikkei has learned.
The budget will be part of the government’s Midterm Defense Program, which Tokyo is aiming to revise by the end of 2022. This is part of Japan’s strategy to lay the groundwork for stronger relations with the U.S. in the face of China’s military expansion.
The budget is based on a per year spending of around 6 trillion yen — the sum of the 5.4 trillion yen in the fiscal year 2022 budget plan, the largest ever, plus 770 billion yen that was included in the 2021 supplementary budget plan.
In the midterm defense plan, the government will provide an estimate for the total budget for five years by adding up the cost of defense equipment. The current plan has set a total budget of about 27.5 trillion yen for fiscal years 2019 to 2023. The next plan will be revised one year ahead of schedule, with the view of possibly increasing the budget by around 3 trillion yen.
The increase in defense spending follows a joint statement issued by then Prime Minister Yoshihide Suga and U.S. President Joe Biden in April 2021, in which Japan committed to strengthening its own defense capabilities as part of renewed Japan-U. S. cooperation. The U.S. is shifting its security interests to East Asia, including China, North Korea, and the Indo-Pacific region, and expects Japan to play an equal role as an ally.
The increase in defense spending will mainly be used to acquire new equipment, deploy troops to the southwest islands near China and Taiwan, and strengthen missile defense.
Japan needs to maintain naval vessels that will replace the Aegis Ashore ground-based interceptor missile system, and to pay for the development of the next generation of fighter jets to be deployed around 2035.
The government also plans to acquire P1 maritime patrol aircraft, C2 transport aircraft, and cover the cost of ammunition ahead of schedule in the fiscal 2021 supplementary budget plan.
Spending will also cover “new areas” such as cyber defense, space, and electromagnetic waves. It will invest in satellites that can detect missile launches from space, and in research on technology to deal with cyberattacks. The U.S., China and other countries are already allocating large amounts of money to these areas.
In the past, the government’s initial budget for defense spending has been set at no more than 1% of Japan’s gross domestic product. The nominal GDP in fiscal year 2019, before the impact of the coronavirus pandemic, was around 557 trillion yen. If the budget expands to 6 trillion yen per year as a result of the revision of the medium-term defense plan, that 1% limit will be exceeded.
