Japan - Defense Budget

The declaration by Japanese Defense Minister Nobuo Kishi that Japan does not limit defense spending to one percent of GDP but instead peg spending levels to security threats represented the latest development in the evolution of Japanese strategic thinking. "We must increase our defence capabilities at a radically different pace than in the past," he said 19 May 2021, citing China's military spending. “The security environment surrounding Japan is changing rapidly with heightened uncertainty,” the Nikkei quoted him as saying. “We will properly allocate the funding we need to protect our nation.”

Kishi’s announcement followed nine years of increased defense spending in response to China’s military modernization and increasingly aggressive assertion of territorial claims in the East and South China Seas, as well as regular Chinese and Russian incursions into Japanese airspace and the continued threat posed by North Korea’s missile program.

The government of Prime Minister Fumio Kishida will scrap its usual ceiling on defense-related spending requests for the coming fiscal year, paving the way for a dramatic increase in military spending. Kishida is set to approve the policy before the end of July 2022. It is clear that Kishida was already planning to boost defense spending, but the assassination of Abe has served to put wind in his sails and even the normally extremely cautious Ministry of Finance is not now raising any objections. Everything that happened in Ukraine has really put the liberal left on the back foot and altered that commitment to peace that has long been a part of the national psyche.

Lawmakers called for Japan's defense budget to be raised to drastically strengthen defense capabilities within five years. The proposal noted that NATO requires member countries to have a defense spending target of at least 2 percent of GDP. Japan's target for fiscal 2022 is less than 1 percent of GDP. The lawmakers appear to be urging the government to increase the budget to the NATO level. If the figure were to reach 2 percent, the budget would exceed 10 trillion yen a year, or more than 75 billion dollars.

But some opposition lawmakers worry that such a move could violate the country's exclusively defense-oriented policy. "The discussion is going too far, taking advantage of the situation in Ukraine," said Ogawa Junya, chair of the Policy Research Committee of the largest opposition, Constitutional Democratic Party. "The plan could put people at risk by provoking neighboring countries," he added.

The LDP's junior coalition partner, Komeito, is reluctant to immediately raise the defense budget. The party maintains it is important to meet the huge need for spending on social security and education. Full-fledged discussions in the Diet are likely to get underway after the Upper House election scheduled for this summer. The outcome could herald a major turning point in Japan's defense policy.

Japan's defense budget for fiscal 2021 is likely to be around 51 billion dollars -- a record high. The budget would be higher for nine years in a row. The Defense Ministry had been negotiating its budget request with the Finance Ministry before the government compiled the budget plan in late Decenber 2020. The defense budget will include funding for research for building two Aegis ships. The new vessels will be built instead of the planned deployment of the land-based Aegis Ashore missile defense system, which is designed to intercept ballistic missiles outside the Earth's atmosphere. The budget will also include costs for developing a replacement for the Air Self-Defense Force's F-2 fighter jets. Costs for designing a surveillance satellite will be earmarked to boost space capabilities. Overall, the defense budget for the next fiscal year, which starts in April 2021, is expected to be about 0.3 billion dollars higher than that of this year.

Japan's Defense Ministry sought a record 52 billion dollar budget for the fiscal year starting in April 2021. The ministry decided on the amount, which is 3.3 percent more than the initial budget for the current fiscal year, at a meeting on Wednesday attended by Defense Minister Kishi Nobuo. The budget request includes about 686 million dollars for space-related programs, such as designing a surveillance satellite slated for launch in 2026 and research on a satellite constellation for missile defense. The ministry is placing a priority on boosting defense capabilities in space. Another priority is upgrading cybersecurity. The request includes 338 million dollars for measures such as creating a cyber defense unit within the Self-Defense Forces.

The ministry is also seeking 731 million dollars for development of a follow-up model to the Air Self-Defense Force's F2 fighter jets, and 256 million dollars for measures to fight the coronavirus and other infectious diseases. Meanwhile, the ministry did not request a specific amount for planning an alternative to the Aegis Ashore land-based missile defense system, or for realignment of US forces in Japan.

The Japanese government signed off 20 December 2019 on its biggest-ever defense budget worth 48.5 billion U.S. dollars for the next fiscal year. Japan's fiscal year begins on April 1st. This was the 8th straight annual increase in military spending under the Abe administration. The Japanese parliament, dominated by Prime Minister Abe's ruling Liberal Democratic Party,will vote on the defense budget in 2020.

Japan may spend a record 5.32 trillion yen (about $50 billion) on defence in 2020, amid rising tensions with its neighbors in the Asia-Pacific, if the Defence Ministry's budget request is approved. The ministry decided at a meeting attended by Defense Minister Takeshi Iwaya on 30 August 2019 to request about 5.3 trillion yen, or about 50 billion dollars, for fiscal 2020, which starts next April. The figure is up 1.2 percent from the 2019 budget. The ministry is seeking nearly 500 million dollars in space-related outlays. It considers outer space a priority domain for boosting defense capabilities. Officials plan to launch a 20-member unit in the Air Self-Defense Force to monitor suspicious satellites. They also plan to acquire equipment to detect jamming of communication and other satellites.

The new budget will fund the purchase of fighter jets, including F35-B aircraft, an upgrade to two existing destroyers to serve as aircraft carriers for the F-35Bs and the development of a Japanese next-generation fighter jet. The budget also aimed to address Japan's expanding defence capabilities in space and cyber-related activities. Additionally, Japan's Defense Ministry intended to invest $38 million in the research of the capability of electromagnetic waves of disrupting enemy communication systems.

Japan spends as much as 1.3 percent of gross domestic product on national security, the defense minister insisted in April 2019. Tokyo sought to resist pressure from the US for a massive rise in military spending. Speaking in parliament, defense minister Takeshi Iwaya said that Japan already spent more than 1 percent of GDP on defense. “If you include expenses for peacekeeping operations, the coastguard budget, other security-related expenses and do some mechanical calculation ... then you get something like 1.1 to 1.3 per cent of GDP during the period of the midterm defence plan,” said Iwaya. Japan’s official defence budget for year ending March 2020 is 0.924 per cent of GDP, including its contribution to the support of US bases. That compares with the North Atlantic Treaty Organisation’s guideline of 2 per cent. But the NATO definition includes several items that Japan’s budget does not, such as peacekeeping, leading Iwaya to suggest that Japan’s contribution is understated.

On 25 December 2018 Prime Minister Shinzo Abe’s Cabinet approved its midterm defense guidelines and an associated defense plan, known as the National Defence Program Guidelines and the Mid-Term Defence Plan. The plan would see Japan spend approximately $243 billion on defense over the next five fiscal years, until 2024. Unsurprisingly, the document is mostly concerned with its regional arch-rival China, lamenting Japan’s “strong concern” over an “uncertain regional security” situation caused by China’s military expansion. Japan is also concerned by the perceived threat posed by North Korea. In 2017, North Korea famously fired two ballistic missiles over Japan, a somewhat provocative move during the volatile Trump-Kim war of words which eventually resulted in a symbolic form of constructive dialogue.

Japan's Defense Ministry planned to request a record-high budget for the fiscal year starting April 2019 to shore up the country's defense capabilities against missile attacks and other threats. Ministry officials told NHK that the ministry will seek about 5.29 trillion yen, or around 48 billion dollars.

Part of the budget will be earmarked for purchasing 2 units of the US-made land-based missile defense system called Aegis Ashore. The ministry says the new system will help improve Japan's response to possible ballistic missile attacks from North Korea, but intends to make efforts to bring down its cost. The ministry came under fire after it revealed last month that the cost of one unit will likely be around 1.2 billion dollars, up nearly 70 percent from the initial estimate of 720 million dollars.

The ministry will also request funds to enhance capabilities to defend remote islands and waters around Japan amid China's growing maritime activities. This will include the cost of purchasing more F-35A stealth fighter jets and introducing a new type of missile interceptor called SM-3 Block IIA on Aegis ships.

Prime Minister Shinzo Abe's Cabinet on 22 December 2017 approved Japan's biggest $46 billion defense budget to bolster ballistic missile defense capability amid escalating tensions on the Korean Peninsula. Under the plan, Japan's 2018 defense budget rose 1.3 percent from the current year. It was the sixth annual increase under Abe, who ended a decade of military budget cuts after taking office in 2012. The defense spending is part of Japan's $860 billion national budget for 2018, also the biggest. The Cabinet also approved an additional $208 million defense spending through March for next-generation missile interceptors — an initial cost of advanced US missile combat systems Aegis Ashore and other equipment.

Japan planned to fuel its defenses with a record defense budget for the 2017 fiscal year (April 1, 2017-March 31, 2018). the Abe administration has mulled expanding the defense budget for fiscal 2017 (April 1, 2017-March 31, 2018) to a record high of 5.1 trillion yen (about 44.9 billion US dollars), marking the fifth consecutive year of increase and topping the 5 trillion yen mark for a second successive year.

This would be the fifth successive annual increase in Japan's military budget, as the country's military seeks to boost fighting capabilities amid an increased Chinese presence in the South China Sea and an aggressive North Korean ballistic missile development program. Proposed upgrades reportedly include the development of two unmanned aerial vehicles. The first will be a surveillance-only device, and will not see completion for some ten years. A second drone program will feature an unmanned fighter jet, and will also be developed over the next ten years.

The Cabinet of Japanese Prime Minister Shinzo Abe approved a record-high military budget on 24 December 2015, marking the fourth consecutive year that spending on defense has increased. Abe's Cabinet approved a 5.05 trillion yen (41.90 billion U.S. dollars) military budget for fiscal 2016, with the amount allocated rising 1.5 percent from levels in 2015 and totaling the most since record keeping began. The military budget, part of a record 96.72 trillion yen (799 billion US dollars) national budget to come into effect from April 2016, is the fourth time defense spending has been hiked under Abe.

On 14 January 2015, Japan's governement announced its biggest defense budget ever, at $42 billion. That budget marked the third straight year of budget increases, with the money slated to go for surveillance aircraft, drones, F-35 fighter jets, and amphibious assault vehicles; all in response to China's rising military power projection in the region. With Prime Minister's Shinzo Abe in control of both houses of the legislature, the budget was expected to pass without difficulty.

On December 17, 2013 Japan announced a large defense build-up and national security strategy aimed at countering China's increasingly assertive claims on disputed territory. The plan calls for increased air and maritime capabilities. The Abe government announced a major increase in military spending of 5 percent over the next five years, which included purchases of 28 US F-35s and two Aegis-equipped destroyers. The five-year budget earmarks more than $230 billion for fighter jets, combat and amphibious vehicles, as well as surveillance drones and early warning aircraft.

In January 2013 it was reported that newly elected Prime Minister Shinzo Abe was planning to create new guidelines for Japan's defense program. Abe decided to increase defense spending to at least ¥4.77 trillion ($54.3 billion). Japenese defense spending peaked in fiscal 2002 at ¥4.96 trillion yen when Junichiro Koizumi was Prime Minister, and the number dropped thereafter, to the initial budget for fiscal 2012 of ¥4.71 trillion.

Abe was expected to scrap the mid-term defense buildup program under the current guidelines endorsed by the former government in December 2010. The Defense Ministry would submit a request to increase the defense budget by more than 100 billion yen, or about 1.14 billion dollars, for fiscal 2013. Some of the money will be used to increase surveillance of the Senkaku Islands and the surrounding waters in the East China Sea. Chinese government ships have repeatedly intruded into the waters. The Abe cabinet was also expected to increase the number of SDF personnel and purchase new equipment.

Defense-related expenditures include spending for maintaining and managing the SDF, improving living conditions in the neighborhoods of defense facilities, and supporting U.S. forces in Japan. In FY2013, defense-related expenditures, which had been declining continuously since FY2003, were increased in real terms for the first time in 11 years, in order to reinforce preparedness aimed at protecting the lives and property of the populace and the nation’s land, sea, and airspace, in light of the increasingly harsh security environment.

Generally speaking, JSDF expenditure on weaponry acquisition in 2012 maintained the level of the previous year. It also followed the general trend of the recent years, emphasizing the development of naval and air weapons systems. According to Japan’s National Defense 2012,the JSDF spent 756.5 billion yen on weapons and systems acquisition, 3% less than that in FY 2011, and accounting for 16% of national defense budget. Among it, ship building cost 172.8 billion yen, which is a rather significant increase from last year, indicating Japan’s intention to strengthen its maritime power. Aircraft purchase cost 136 billion yen. In FY 2012, the JSDF spent 102.7 billion yen on equipment R&D, 1% higher than that of last year.

According to Japanese security policy, maintaining a military establishment is only one method -- and by no means the best method -- to achieve national security. Diplomacy, economic aid and development, and a close relationship with the United States under the terms of the 1960 security treaty are all considered more important. Japan is keeping military expenditure at only 1% of GDP, even though this is still a very significant amount. Japan's posture is a defensive one, with no weapons of mass destruction, no long-range bombers, no middle or long-range missiles, no aircraft carriers and no nuclear submarines. But Japan has considerable conventional weapons, and wants to use its Self-Defence Forces for peacekeeping operations. Japan is however very concerned over the military build-up in East Asia.

The Defense Agency requested 4.933 trillion yen for its fiscal 2005 budget to update the Self-Defense Forces. This amounted to US$44.693 billion at the exchange rate [1 USD = 110.375 JPY] prevailing in late 2003. On 24 December 2006, the Cabinet passed a $41.75 billion spending plan for fiscal year 2007, which begins in April 2007. This was down $106.96 million, some 0.3 percent, from 2006.

The Defense Agency's overall budget request for the fiscal year beginning 01 April 2004 amounts to 4.96 trillion yen, up 0.7 percent from the initial budget for fiscal 2003. This amounts to US$45.324 billion at the exchange rate [1 USD = 109.433 JPY ] prevailing in late 2003.

Defense-related expenditures for FY2002 totaled 4.9395 trillion yen (excluding costs for SACO), a 0.6 billion yen or almost zero percent increase over the previous fiscal year, indicating that defense-related expenditures are still moderate. The FY2002 budget includes 16.5 billion yen for SACO-related expenses. Including these expenses, total defense-related expenditures are 4.9560 trillion yen, which is almost the same amount as for the previous fiscal year.

Even in the 1980s, defense spending was accorded a relatively low priority. For FY 1986 through FY 1990, defense's share of the general budget was around 6.5 percent, compared with approximately 28 percent for the United States. In 1987 Japan ranked sixth in the world in total defense expenditures behind the Soviet Union, the United States, France, the Federal Republic of Germany (West Germany), and Britain. By 1989 it ranked third after the United States and the Soviet Union, mainly because of the increased value of the yen. In FY 1991, defense accounted for 6.2 percent of the budget.

In addition to annual budgets, the Defense Agency prepared a series of cabinet-approved buildup plans beginning in 1957, which set goals for specific task capabilities and established procurement targets to achieve them. Under the first three plans (for 1958-60, 1962-66, and 1967-71), funding priorities were set to establish the ability to counter limited aggression. Economic difficulties following the 1973 oil crisis, however, caused major problems in achieving the Fourth Defense Buildup Plan (1972-76), and forced funding to be cut, raising questions about the basic concepts underlying defense policies.

In 1976 the government recognized that substantial increases in spending, personnel, and bases would be virtually impossible. Instead, a "standard defense concept" was suggested, one stressing qualitative improvements in the SDF, rather than quantitative ones. It was decided that defense spending would focus on achieving a basic level of defense as set forth in the 1976 National Defense Program Outline. Thereafter, the government ceased to offer buildup plans that alarmed the public by their seemingly open-ended nature and switched to reliance on single fiscal year formulas that offered explicit, attainable goals.

Defense spending increased slightly during the late 1970s, and in the 1980s only the defense and Official Development Assistance budgets were allowed to increase in real terms. In 1985 the Defense Agency developed the Mid-Term Defense Estimate objectives for FY 1986 through FY 1990, to improve SDF front-line equipment and upgrade logistic support systems. For the GSDF, these measures included the purchase of advanced weapons and equipment to improve antitank, artillery, ground-to-sea firepower, and mobile capabilities. For the MSDF, the focus was on upgrading antisubmarine capabilities, with the purchase of new destroyer escorts equipped with the Aegis system and SH-60J antisubmarine helicopters, and on improving antimine warfare and air defense systems. ASDF funds were concentrated on the purchase of fighter aircraft and rescue helicopters. The entire cost of the Mid-Term Defense Estimate for FY 1986 through FY 1990 was projected at approximately ¥18.4 trillion (approximately US$83.2 billion, at the 1985 exchange rate).

In FY 1989, the ¥3.9 trillion defense budget accounted for 6.49 percent of the total budget, or 1.006 percent of GNP. In addition to the Defense Agency itself, the defense budget supported the Defense Facilities Administration Agency and the Security Council. Defense Agency funding covered the GSDF, the MSDF, the ASDF, the internal bureaus, the Joint Staff Council, the National Defense Academy, the National Defense Medical College, the National Institute for Defense Studies, the Technical Research and Development Institute, and the Central Procurement Office.

The FY 1990 defense budget, at 0.997 percent of the forecasted GNP, dipped below the 1 percent level for the first time since it was reached in 1987. But the more than ¥4.1 trillion budget still marked a 6.1 percent increase over the FY 1989 defense budget and provided virtually all of the ¥104 billion requested for research and development, including substantial funds for guided-missile and communications technologies. Although some ¥34.6 billion was authorized over several years for joint Japan-United States research and development of the experimental FSX fighter aircraft, disputes over this project were believed to have convinced the Defense Agency to strengthen the capability of the domestic arms industry and increase its share of SDF contracts. After originally being cut, funds were also restored for thirty advanced model tanks and the last Aegis multiple-targeting-equipped destroyer escort needed to complete the Mid-Term Defense Estimate. The 6.1 percent defense increase was accompanied by an even larger (8.2 percent) increase in Official Development Assistance funding. The defense budget continued to grow in real terms in the early 1990s to ¥43.8 trillion in 1991 and ¥45.5 trillion in 1992 but remained less than 1 percent of GNP.

Japanese officials resist United States pressure to agree formally that Japan will support more of the cost of maintaining United States troops, claiming that such a move will require revision of agreements between the two nations. But in FY 1989, the Japanese government contributed US$2.4 billion -- roughly 40 percent -- of the total cost. The contribution slated for FY 1990 was increased to US$2.8 billion -- nearly 10 percent of the total defense budget -- and by the end of FY 1990 the Japanese government expected to assume all expenses for utilities and building maintenance costs for United States troops stationed in Japan.

According to some estimates, the unit costs of Japanese vehicles are three to ten times as expensive as those of the US vehicles. Similar price gaps exist between Japan and England, France, Germany and other European nations. It is believed that Russian equipment cost 30% less than equivalent US equipment. Given such huge discrepancies, Japan's defense spending in reality is at about the same level with those of South Korea and Taiwan.

¦Government's Draft Budget for Aerospace Adopted

The Government's draft budget for 2006 was adopted during the Cabinet meeting of 24 December 2005.

Numbers in brackets ( ) are not included in total number of aircraft.