Japan Proposes Defense Budget Below LDP Expectations

The Ministry of Finance of Japan has proposed a defense budget of 50 trillion to 60 trillion yen for the five-year period starting in April 2027. While this figure exceeds the current 43 trillion yen plan, it falls significantly short of the 80 trillion yen anticipated by some defense officials and lawmakers within the Liberal Democratic Party.

Finance ministry officials warned defense contractors that the shortfall could lead to order cuts of up to 50% for certain aircraft and missiles, including US-built F-35 stealth fighters. Drone orders are expected to remain unaffected. The ministry argues that higher spending is unsustainable given Prime Minister Sanae Takaichi's commitments to economic growth and a food sales tax cut, which would create an annual revenue shortfall of 4.3 trillion yen.

The proposed spending level would leave Japan below its own target of spending 2% of GDP on defense. This also falls short of the 2026 US National Defense Strategy, which calls for allies to allocate 3.5% of GDP to their armed forces. The Ministry of Defense of Japan has stated that the size of the next build-up plan has not yet been decided, maintaining that the budget should be determined by Japan's specific defense needs.