By Focus | 2025-09-23

Japan's Ministry of Defense has requested a record-high budget of 8.8 trillion JPY ($60.1 billion) for the upcoming fiscal year, aimed at strengthening counterstrike capabilities, drone warfare and a multilayered littoral defense system.

The budget request, announced August 29, comes as officials cite a "severely intensifying security environment" in the Indo-Pacific region.

If approved early next year, it would mark the 14th consecutive annual increase, up $1 billion from the current budget.

The request is part of Tokyo's five-year defense buildup plan launched in December 2022, which seeks to raise defense spending to 2% of GDP by 2027. Japan is on track, with defense-related spending already reaching 1.8% of GDP this year, according to the ministry.

Defense spending in Japan was once capped at 1% of GDP, a principle maintained even after it abolished the official limit in 1987. Russia's 2022 full-scale invasion of Ukraine and escalating tensions with China have eroded this restraint.

China menaces island chains, Japan

Chinese military activity has expanded in Japan's surrounding waters and airspace, Tokyo warned in a July defense white paper. Beijing has stepped up operations around the Senkaku Islands, the Sea of Japan and the western Pacific "beyond the so-called first-island chain and extending to the second-island chain."

The first island chain includes Japan, Taiwan and the Philippines.

The second island chain extends from Japan to Guam to Western New Guinea.

Recent incidents include a Chinese coast guard helicopter entering Japanese airspace in May, a Chinese aircraft carrier sailing close to Japanese territorial waters last September and a military aircraft incursion in August 2024. In July, both of China's active aircraft carriers were deployed deep into the western Pacific, while Chinese warplanes have repeatedly flown dangerously close to Japanese aircraft, Tokyo said.

The budget request allocates $8.5 billion for standoff weapons, including an extended-range version of the domestically made Type 12 surface-to-ship missile, as well as hypersonic systems. Another $1.3 billion is earmarked for 12 F-35 fighter jets, continuing Japan's air force modernization.

The spending reflects the "severely intensifying security environment" around Japan, a Defense Ministry official told reporters in Tokyo, AFP reported.

"There's a need to catch up with significant changes in the way militaries fight," the official said.

Prioritizing drones

The budget request asks for roughly tripled spending on various types of unmanned vehicles to 313 billion JPY ($2.1 billion).

A central item in the request is the Synchronized, Hybrid, Integrated and Enhanced Littoral Defense (SHIELD) program, with about $879 million allocated. SHIELD envisions a multi-domain drone network, including ship- and ground-launched drones for reconnaissance and strike missions, as well as unmanned surface and underwater vehicles.

The boosted spending on land and sea drones would come to $20.5 billion. They are meant to reinforce coastal defense. If an enemy bypasses Japan's standoff missiles, SHIELD is expected to block an invasion closer to shore, officials said. Japan aims to complete the system by March 2028, though it has not disclosed details on deployment sites.

"As seen in recent conflicts like Ukraine, tactics involving unmanned assets … are becoming prevalent," a ministry official told reporters, the Japan Times reported.

"Recognizing this as an urgent priority, Japan must swiftly establish an asymmetrical, multilayered defense posture. This will be achieved by leveraging not only manned assets, but also inexpensive, mass-produced unmanned assets, and combining them effectively."

Lawmakers are pressing the military to deploy drones to deter Chinese incursions. Tokyo is looking to suppliers in Australia, Türkiye, the United States and other countries in its bid to buy air, surface and underwater drones rapidly.

Japanese officials stressed the need to develop a domestic drone industry and provide "substantial funding" for artificial intelligence and flight control systems. "It's undoubtedly preferable to have more domestic products," one official told the Japan Times.

The Defense Ministry announced plans for a new office on "Pacific defense initiatives," focusing on surveillance and monitoring along Japan's eastern approaches. "On the Pacific side [of Japan], we're seeing activities like the simultaneous operations of two or more aircraft carriers and aircraft being launched from them," a defense official said.