Japan is stepping up efforts to become a global arms producer as the new government of Prime Minister Sanae Takaichi embraces major defense liberalization, Bloomberg reports. Takaichi’s Liberal Democratic Party (LDP) and coalition partner Japan Innovation Party plan to roll back restrictions on defense exports, build weapons factories, and accelerate investment in the nation’s military sector.
On Friday, Japanese Defense Minister Shinjiro Koizumi convened senior ministry officials to discuss a successor to the five-year defense spending plan through 2027, along with updates to the national security and defense strategies. A key goal is to help Japanese weapons makers thrive as global military budgets surge. Currently, Japan’s five largest defense companies account for less than 2% of global defense shipments, although their share prices have risen on expectations of new orders.
Prime Minister Takaichi, in her first parliamentary speech on October 24, pledged to boost spending on defense to 2% of gross domestic product by March 2027, up from the current 1.8%. The move also signals Japan’s commitment to its U.S. security alliance amid pressure from President Donald Trump, who has urged allies to spend 5% of GDP on defense. “I will boost the deterrence and response ability of our military alliance with the US,” Takaichi said.
Historically, Japan’s defense sector faced high barriers to exports, with lingering post-World War II taboos labeling the industry as the “industry of death.” Japanese defense firms often lacked government backing for overseas sales, putting them at a disadvantage against European competitors. Masahiko Arai, senior vice president of Mitsubishi Electric Corp., recalled how Japanese companies struggled to secure foreign contracts without diplomatic support.
Recent developments indicate a turning point. In August, a Japanese consortium led by Mitsubishi Heavy Industries was selected as the preferred bidder to supply 11 warships worth up to $6.8 billion to Australia. Lobbying by former Prime Minister Shigeru Ishiba and Japan’s defense minister, alongside a public relations campaign in Sydney, helped secure the deal. Bloomberg notes that if finalized, it would be only the second major post-war Japanese defense export. New Zealand has also expressed interest in the ships.
Japan’s defense strategy increasingly benchmarks successful programs in South Korea, which has secured multibillion-dollar contracts for howitzers, rocket systems, and ammunition with countries such as Poland. Japanese policymakers plan to emulate such success, particularly in advanced missile systems and space technology. The government intends to remove the general ban on exporting lethal military equipment, a restriction historically enforced by the LDP’s former coalition partner Komeito.
Industry executives are optimistic about Japan’s potential. Mitsubishi Electric, part of a Japan-UK-Italy consortium developing a sixth-generation fighter jet, expects defense revenue to nearly double to ¥600 billion ($3.9 billion) by 2030. NEC Corp., which produces satellites, submarine sonars, and drones, has expanded its workforce to meet growing domestic and international demand.
Prime Minister Takaichi’s government also plans to expand Japan’s missile and munitions production, supporting U.S. needs amid concerns over stockpiles. While Japan’s defense sector has traditionally accounted for less than 20% of company revenues, executives like Mitsubishi Heavy CEO Eisaku Ito say they are positioning for future trends, including unmanned systems and automation.
Challenges remain, including lingering social stigma toward the defense industry, hesitancy from companies to divert investment from core businesses, and difficulties connecting with overseas supply chains. However, with strong government backing, spiraling global defense budgets, and a growing societal acceptance of a robust military, industry insiders see a clear path forward.
“The pieces are being put into place for Japan to become a global defense player,” said Frank Clark, a former U.S. military attache in Tokyo now heading defense advisory firm Pacforce. Bloomberg reports that Japan’s renewed push comes amid heightened regional security concerns, including tensions over Taiwan and North Korea, driving a strategic shift in Asia’s largest economy.
