Japan Ends Decades-Old Ban on Lethal Weapons Exports Amid Regional Security Shifts

The defense budget is in its fourth year of a five-year plan to double from roughly $35 billion in 2022 to about $60 billion by 2027, positioning Japan as the ninth-biggest military spender worldwide.

Government contracts have grown large enough to attract profits for firms previously limited to domestic sales. This fiscal commitment supports ambitious projects, including the Ministry of Defense’s Acquisition, Technology and Logistics Agency jointly developing a sixth-generation stealth fighter with Italy and the United Kingdom.

Mitsubishi Heavy Industries is building a new hypersonic glide vehicle, marking Japan's first ballistic missile capability.

The company is also constructing 11 Mogami-class warships ordered last year by Australia, Tokyo's first major overseas arms sale. The Philippines and Indonesia have expressed interest in purchasing Japanese defense systems, including a stripped-down version of the Mogami-class frigate.

Malaysia and Vietnam, which have existing technology transfer agreements with Japan and a history of buying its nonlethal defense products, stand to benefit from expanded access.

In May 2026, Vietnam hosted Takaichi to discuss critical mineral supply chains and security in the South China Sea. These efforts aim to counter Chinese maritime coercion in Southeast Asia, where Japanese goods could make deterrence more affordable.

The war in Ukraine, now in its fourth year, has influenced Japan's priorities, highlighting the risks of depleted missile stockpiles and the need for mass-producible unmanned platforms.

Japanese planners are investing in cheaper drones, autonomous underwater vehicles, cyber capabilities, and long-range strike systems to sustain operations in a prolonged conflict. Lessons from Ukraine and recent Gulf Arab interceptor shortages have prompted a focus on old-school munitions production.

Beyond security, the defense buildup supports Tokyo's economic revival through investments in aerospace, shipbuilding, and software manufacturing.

Japanese officials hope these steps demonstrate to the Trump administration that the country is sharing the security burden more equitably. U.S. ambassadors have urged Japan to bolster its defenses, a call now gaining traction amid waning confidence in American guarantees.

Challenges persist, including a lack of engineering talent, underinvested facilities, and ongoing reliance on China for military components. Most Japanese defense contractors are divisions of larger conglomerates with profitable China-dependent operations, complicating expansion as Beijing's retaliation intensifies.

Cybersecurity vulnerabilities, exposed by repeated network intrusions, pose risks to intelligence sharing and intellectual property protection.

U.S. suppliers. Finkel highlighted that Japanese products could offer middle powers in Europe and Southeast Asia a reliable alternative, reducing wait times and introducing competition.