Japan has warned defense contractors of deep cuts to expected orders as funding constraints threaten to scale back its military buildup, Reuters reported on Nov. 13, citing four people familiar with the matter. Prime Minister Sanae Takaichi’s government says the buildup is needed to counter China. Source
Finance Ministry officials proposed spending ¥50 trillion to ¥60 trillion on defense over the five years starting in April 2027, according to Reuters’ sources. That would exceed the current five-year plan’s ¥43 trillion allocation—but fall well below the ¥80 trillion some defense officials and ruling Liberal Democratic Party lawmakers had assumed and used in contractor negotiations. Spending could rise while the expected shopping list shrinks. Source
“Nothing has been decided on the size of the next defense buildup plan,” a Defense Ministry spokesperson told Reuters. The spokesperson said the ministry’s position was to determine Japan’s defense needs and build the budget accordingly. Finance Minister Satsuki Katayama declined to comment substantively, saying an advisory panel had not discussed matters at that level of detail. Source
The lower-than-expected spending could mean cuts of up to half in planned purchases of some missiles and aircraft from domestic and overseas suppliers, including U.S.-built F-35 stealth fighters, Reuters’ sources said. The report does not specify how many F-35s could be affected. Drone orders would be unaffected by the proposal, according to one source. Source
Finance Ministry officials argue that a steeper defense increase would be difficult to finance alongside Takaichi’s promises to invest in economic growth and cut the sales tax on food, three sources told Reuters. The proposed tax cut would create an annual ¥4.3 trillion revenue shortfall, the report said. Source
One ruling-party official familiar with the discussions objected to spending in the ¥50 trillion range. The official, speaking anonymously to Reuters, called that figure “out of the question” for building Japan’s deterrent capabilities. Source
Takaichi has pledged to accelerate the buildup, with a revised national security strategy and defense plan expected by the end of 2026. Source
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