Japan has unveiled a record-breaking defence budget of 8.7 trillion yen ($55 billion) for 2025, underlining its commitment to strengthening military capabilities amid growing threats from China, North Korea, and Russia. This allocation marks a significant step in Japan's five-year military buildup under its 2022 national security strategy.

The defence budget, part of an overall national budget of over USD 730 billion, awaits parliamentary nods by March 2025. A substantial portion of the defence allocation focuses on acquiring long-range missiles, including US-made Tomahawks, to enhance Japan’s strike-back capability. The deployment of these missiles is expected to begin late in the fiscal year.

Focus on Long-Range Defence Systems

The budget earmarks 940 billion yen ($6 billion) for advanced “standoff” defence systems, which include long-range missiles, satellite constellations, and other critical arsenals. Additionally, 1.8 billion yen ($11.4 million) is allocated for equipping Aegis-class destroyers to launch Tomahawks. To reinforce its missile defence capabilities, 533 billion yen ($3.37 billion) will fund interceptors and a mobile reconnaissance radar system in Okinawa, home to more than half of the 50,000 American troops stationed in Japan.

Ambitious Military Spending Goals

Japan aims to double its annual military spending to approximately 10 trillion yen ($63 billion), potentially becoming the world’s third-largest military spender, following the United States and China. In line with these goals, the budget also allocates 314.8 billion yen ($2 billion) to construct three upgraded Mogami-class destroyers. These ships, equipped with long-range missiles and enhanced anti-submarine warfare functions, boast advanced stealth capabilities and a reduced crew requirement due to automation.

These destroyers, built by Mitsubishi Heavy Industries, are among the candidates for Australia’s Sea 3000 frigate project. Japan’s Defence Minister Gen Nakatani emphasized that the collaboration could strengthen bilateral ties with Australia and bolster Japan's warship capabilities.

Strengthening Defence Industry and Alliances

Japan is focusing on enhancing its domestic defence industry by participating in joint development projects and promoting foreign sales. A notable initiative involves the development of a next-generation fighter jet in collaboration with Britain and Italy, set to deploy by 2035. The project has been allocated 108.7 billion yen ($690 million) for 2025.

To address its declining population and its impact on the armed forces, Japan is investing in unmanned weapons and artificial intelligence, with 111 billion yen ($703 million) set aside for related technologies. Concurrently, the government has introduced measures to improve salaries, working conditions, and career opportunities for Self-Defence Force personnel, aiming to attract more applicants.

Strengthening Regional Cooperation

Japan’s efforts extend beyond its borders, as it seeks to deepen ties with Australia, viewed as a semi-ally in addressing China’s growing regional influence. The two nations continue to enhance their cooperation on security and defence, further solidifying their partnership.

The approval of this record defence budget underscores Japan's strategic intent to modernize its military capabilities and fortify its position in an increasingly complex regional security environment.