Japan's Defense Ministry eyes record 8.9 tril. yen in FY 2027 budget request

Japan's Defense Ministry is planning to request a staggering budget of 8.9 trillion yen for fiscal 2027, according to sources familiar with the matter. This request, to be submitted to the Finance Ministry by the end of August, marks a significant increase in defense spending as Tokyo intensifies its defense efforts in response to regional security threats and emerging forms of warfare.

The final budget is anticipated to rise further due to unspecified amounts included in the current request, which will be determined during year-end negotiations. The upcoming budget will also incorporate conclusions from a review of Japan's three national security documents, with officials suggesting defense expenditures could potentially reach 10 trillion yen.

The fiscal 2027 request emphasizes the preparation of the Self-Defense Forces for new forms of warfare, including the use of drones and artificial intelligence. Japan aims to employ AI to enhance command-and-control operations and secure longer-range missiles capable of counterstrikes. Additionally, the budget allocation includes funding for cloud infrastructure to safeguard classified data and organizational reforms to bolster defense cooperation with foreign partners and Japan's domestic defense industry.

This budget proposal is grounded in Japan's five-year defense buildup program, which allocates a total of 43 trillion yen for defense spending from fiscal 2023 to 2027. Japan's defense spending surge, initiated since the adoption of a new national security strategy in 2022, reflects growing military threats from China, North Korea, and Russia.

Critics argue that Japan's escalating defense capabilities could spark a regional arms race in East Asia, a concern voiced by China, which has criticized the government for advancing what it perceives as "neo-militarism" under Prime Minister Sanae Takaichi.