Japan approves record $58B defence budget amid regional tensions

Japan’s cabinet has recently approved a record-high defence budget worth $58 billion for fiscal 2026 in the midst of rising tensions with China.

The draft budget for the next fiscal, which was approved on Friday, includes a defence budget of 9.04 trillion yen. The recent budget is 9.4 percent bigger than the previous fiscal year’s budget.

According to the Kyodo news agency, in the 2025 fiscal year budget, 8.7 trillion yen ($55.7 billion) was allocated for military purposes.

The recent uptick in budget comes in the fourth year of Japan’s five-year 43-trillion-yen ($275 billion) program, aiming to double its yearly arms spending to 2 percent of GDP.

Modernization of defence capabilities

The budget revolves around modernizing coastal defences and fortifying strike-back capabilities with unmanned weapons and surface-to-ship missiles.

Around 100.1 billion yen ($641 million) will be used to develop the “Shield” layered coastal defence system equipped with aerial surface and underwater vehicles for March 2028, as reported by defence ministry officials.

Moreover, Japan will also spend 1.1 billion yen ($7 million) on drone technology, including underwater drones for surveillance.

The Asian country will also invest another 1.1 billion yen to acquire monitoring satellite interference equipment, aiming to strengthen its space capabilities.

30.1 billion yen ($193 million) will be used to procure hypersonic guided missiles.

Rising regional tensions

The approval of the defence budget comes on the heels of escalating regional tensions with China. For months, China and Japan have been locked in a diplomatic row over Japan’s PM Sanae Takaichi’s controversial remarks over the Taiwan conflict.

In response, China imposed diplomatic and economic restrictions on Japan, including a ban on travel and import of seafood.

Recently, China’s defence ministry also blamed Japan for fuelling “space war” based on recent developments and breakthroughs, such as launching cargo spacecraft and satellites for intelligence systems and GPS systems.

According to defence ministry spokesperson Zhang Xiaogang, “The country is now taking an offensive space policy, it is hardly surprising that there are growing concerns of another Pearl Harbor scenario.”

Japan considers China as the country’s biggest strategic challenge based on the recent security strategy. Therefore, it has been involved in security cooperation with the US.