Japan has set a new postwar defense spending record for its 2025 fiscal year, with a base budget of ¥8.7 trillion (approximately $57 billion) reported by the Ministry of Defense. This figure represents a nearly 60 percent increase over five years. When including Coast Guard funding and U.S. force realignment expenses, Japan’s total defense-related outlay reached ¥9.9 trillion, equivalent to 1.8 percent of its Gross Domestic Product. This significant increase moves Japan closer to its revised security objective: allocating 2 percent of GDP to defense spending. Originally targeted for 2027, Prime Minister Sanae Takaichi’s administration now anticipates achieving this goal earlier. As Prime Minister Sanae Takaichi noted, this acceleration is “essential for Japan’s readiness in an era of growing regional uncertainty.”
This sharp rise in defense spending occurs amidst China’s ongoing military expansion, North Korea’s continuous missile testing, and intensifying U.S.–China strategic rivalry across the Indo-Pacific. Japanese defense officials attribute these developments as justification for a stronger, more self-reliant national defense posture.
The 2025 allocation funds personnel costs, base and facility upgrades, and procurement of advanced weapons platforms. These include next-generation fighter jets and new classes of surface combatants. The budget also supports developing long-range strike systems, modernizing command-and-control infrastructure, and enhancing cyber and space defense capabilities. These initiatives form part of Japan’s “Defense Buildup Program,” launched in 2022.
Japan’s current defense expenditures represent a significant departure from its postwar convention. This tradition, established in 1976 under Prime Minister Takeo Miki, capped defense spending at roughly one percent of national output, symbolizing Japan’s pacifist stance for decades. While the ceiling was formally lifted in the 1980s by Yasuhiro Nakasone, subsequent governments largely adhered to it until the late 2010s, when pressure mounted to expand defense capacity, positioning Japan to become one of the world’s top military spenders.
By 2025, Japan’s defense spending indeed places it among the world’s top military spenders. The Defense Ministry stated the expanded budget maintains deterrence and responds to “new forms of warfare,” including electronic, unmanned, and hypersonic threats, needs it has clearly outlined. The Air, Maritime, and Ground Self-Defense Forces have introduced modernization programs focusing on joint operations, rapid mobility, and interoperability with U.S. and allied forces.
This strategic shift strengthens the Pacific alliance network, providing greater capability integration with U.S. forces in the region. It also creates new opportunities for industrial cooperation in autonomous systems, missile defense, and secure communications.
Japan’s rapid rearmament signals a broader geopolitical shift. Tokyo’s long-held policy of restraint now gives way to a defense strategy built on deterrence, technological sophistication, and readiness for high-intensity conflict. As Japan approaches the 2 percent threshold, its decisions in the upcoming fiscal cycle will define its evolving role as a front-line security actor in the Indo-Pacific.