Japan Shatters Defense Budget Records with ¥9 Trillion Plan, Hitting 2% GDP Goal Early

Japan's defense spending has officially entered the 9 trillion yen era. On December 26, Prime Minister Sanae Takaichi's cabinet approved a record-breaking 9.04 trillion yen ($58 billion) draft budget for fiscal year 2026. It's a 3.8% jump from last year, marking the 12th consecutive year of record highs. By front-loading expenditures, Japan's now on track to hit its 2% GDP defense target two years ahead of the original 2027 deadline.

Geopolitical Pressure and the Trump Factor

This massive buildup responds to mounting military pressure from nuclear-armed neighbors: China, North Korea, and Russia. The Takaichi administration's also reacting to calls from the Trump administration in the U.S. for allies to significantly boost their security contributions. The regional security environment's deteriorating, and Tokyo isn't wasting any time in beefing up its deterrent capabilities.

Investing in 'SHIELD' and Hypersonic Strikes

The budget prioritizes high-tech warfare. A significant 100.1 billion yen is earmarked for 'SHIELD', an integrated coastal defense system utilizing a fleet of unmanned air, sea, and underwater vehicles. Additionally, the Ministry of Defense allocated 30.1 billion yen to begin mass-producing hypersonic guided missiles—weapons capable of flying five times the speed of sound—to cement its counterstrike capabilities.

Maritime and air domains aren't being left behind. The Izumo-class carriers are undergoing final modifications to operate F-35B fighters, while 160.2 billion yen will fund the development of a next-generation fighter in partnership with the UK and Italy. The reorganization of the Air Self-Defense Force into the Air and Space Self-Defense Force is also set for next year.