Japan looks to arms once again: the rearmament that could shift Asia’s balance of power
Sanae Takaichi’s Government raises defence spending to 2% of GDP and drives an export-oriented arms industry amidst growing pressure from China and instability in the Indo-Pacific
Adalberto Agozino
There is something deeply symbolic about the new security model being forged by Japan as it commemorates the 81st anniversary of the atomic bombings of Hiroshima. Eight decades after its 1945 defeat, the only nation in history to have suffered a nuclear attack is progressively abandoning the military restrictions that defined its post-war identity.
The strategy led by Prime Minister Sanae Takaichi sets the defence budget at 2% of GDP, opens the door to arms exports, and seeks to turn the military industry into an engine of innovation and economic growth.
This transformation is a response to the deteriorating strategic environment in the Indo-Pacific, marked by China’s military expansion, North Korea’s nuclear threats, Russia’s presence, and uncertainty over the long-term extent of the United States’ commitment to the region.
The new Defense White Paper presented by Japan’s Ministry of Defense frames the strengthening of the Self-Defense Forces not merely as an operational necessity against new cyber, space, and artificial intelligence challenges, but also as an opportunity to bolster the nation’s industrial and technological base.
Military personnel take photos and videos of the arrival of US President Donald Trump aboard the aircraft carrier USS George Washington at the US Naval Base in Yokosuka, Japan, on 28 October 2025 – REUTERS/ KIM KYUNG-HOON
From the 1947 Pacifist Constitution to Proactive Pacifism
Japan’s regulatory framework stemmed from the 1947 Constitution enacted during the US occupation, whose Article 9 enshrined the renunciation of war and prohibited the maintenance of traditional armed forces.
However, the geopolitical demands of the Cold War led in 1954 to the creation of the Self-Defense Forces, a mechanism that allowed Tokyo to delegate its strategic security to Washington while focusing its resources on economic development.
Following the collapse of the Soviet Bloc, developments such as North Korean missile programmes and Beijing’s military rise began to strain this framework. Under Shinzo Abe’s premiership, legislation passed in 2015 authorised the exercise of the right to collective self-defence under the doctrine of “proactive pacifism”. The Takaichi administration is deepening this doctrine by adapting the nation’s operational and industrial capabilities to 21st-century conflict scenarios.
Taiwan and the dispute with China at the heart of the strategy
In Tokyo’s strategic calculus, China poses the greatest security challenge. Beijing’s military activity around the Senkaku Islands (known as Diaoyu in China) and increased pressure on Taiwan have altered risk perception in Japan, given the proximity of its south-western islands, such as Yonaguni and Ishigaki, and US bases in Okinawa.
Prime Minister Takaichi has explicitly stated that a Chinese military aggression against Taiwan could constitute a direct threat to Japan’s survival, enabling intervention by its Self-Defense Forces. This stance has drawn sharp diplomatic rebukes from China’s Ministry of Foreign Affairs, which accuses the Japanese Government of promoting a “new militarism”.
Defence budget and the projection of the military industry
On the economic front, Japan’s defence expenditure for fiscal year 2026 reaches 9.0353 trillion yen, consolidating the 2% of GDP target and breaking the historical 1% ceiling that had governed policy for decades.
The state strategy is aimed at energising traditional contractors such as Mitsubishi Heavy Industries, Kawasaki Heavy Industries, Mitsubishi Electric, and Fuji Heavy Industries, while also incorporating emerging start-ups specialising in drone technology, sensors, and autonomous systems.
The Chinese Navy submarine rescue ship Xihu in the Sea of Japan, on 5 August 2025 – Russian Ministry of Defence via REUTERS
Key initiatives in this rollout include:
Export of the Mogami-class frigate: Australia has selected this design developed by Mitsubishi Heavy Industries to modernise its naval fleet, positioning Japan as a direct provider of regional security.
Global Combat Air Programme (GCAP): A joint venture supported by the UK Ministry of Defence and Italy’s Ministry of Defence to develop a next-generation fighter aircraft slated for the 2030s, under which Mitsubishi Electric aims to increase its annual defence turnover to 690 billion yen by 2031.
Industrial cooperation with the United States: The so-called Operation Supercharge, agreed between Tokyo and Washington, aims to accelerate the joint production of high-precision missiles such as the SM-3 Block IIA and AMRAAM systems.
Despite technological momentum, the initiative faces structural macroeconomic headwinds, marked by an ageing population, high public debt, and modest GDP growth forecasts (0.8% according to the International Monetary Fund), forcing the Government to balance military spending against rising healthcare and pension commitments.
The logo of the International Monetary Fund inside its headquarters following the IMF/World Bank annual meetings in Washington, US – REUTERS/ YURI GRIPAS
The reshaped balance of power in the Pacific
Japan’s military transformation is reshaping alliance dynamics along the first island chain in the Pacific. Tokyo is cementing its role in regional containment frameworks through closer coordination with the United States, Australia, the Philippines, and the Quad alongside India.
Furthermore, military dialogue between Japan and South Korea has made strides against the shared threat posed by North Korea’s nuclear programme, although historical memories linked to the colonial era continue to act as a mitigating factor in bilateral relations.
From the perspective of civil society, atomic bomb survivor groups such as Nihon Hidankyo have warned that revising the pacifist constitutional principle alters a core pillar of the nation’s international identity. The trajectory of this policy will determine whether Japan’s military buildup serves as a deterrent fostering stability in the Indo-Pacific or accelerates an arms race across the region.