Japan Considers Raising Defense Spending to 3.5% of GDP

The Government of Japan is considering raising its midterm defense spending target to as much as 3.5% of gross domestic product. This potential shift aims to align Japanese defense commitments with those of NATO and other United States allies.

Defense officials signaled this willingness during meetings with U.S. counterparts. The proposed 3.5% target mirrors a 10-year commitment previously established by South Korea, although Japanese officials are also evaluating a lower target of 3%.

The prospect of increased spending under Prime Minister Sanae Takaichi has sparked concerns regarding the potential impact on financial markets.