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Japan Eyes Drone Fleets in Record $60 Billion Defense Budget Proposal

(Bloomberg) -- Japan’s Defense Ministry is requesting a record ¥8.8 trillion ($59.8 billion) for its share of the national budget for the fiscal year starting in April, including money for fleets of drones and long-range missiles to counter growing challenges from China and North Korea.

Tokyo is in the process of raising its military budget to around 2% of gross domestic product by 2027 but, like other American allies, it has faced pressure from Donald Trump’s administration to spend much more to lower the burden on the US military.

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For the coming year, the ministry is seeking a total of ¥312.8 billion for unmanned systems such as air, sea-surface and underwater drones that will have roles such as surveillance and suicide attacks. In its budget request, the ministry highlighted the growing role of drones in warfare and said it would create a comprehensive network of unmanned systems to protect Japan’s borders.

Reflecting Japan’s limited domestic drone production capabilities, the ministry said it would look at both foreign and local sources to build up its drone inventory. On a trip to Turkey earlier this month, Defense Minister Gen Nakatani toured a factory that makes Baykar drones that are being used in the conflict in Ukraine.

Drones also offer Japan a partial solution to a chronic recruitment problem for its military, known as the Self Defense Forces, as the national population declines. The SDF has struggled to meet even half of its recruitment targets in recent years. The government has responded by trying to improve living conditions and perks for SDF recruits, and in the coming year the ministry wants to spend ¥765.8 billion on such measures.

The budget request also includes ¥1.024 trillion for the continued development and deployment of long-range missiles designed to deter regional rivals. So-called “stand-off” missiles, including Japan’s Type 12 missile and the US-made Tomahawks were a centerpiece of plans announced in 2022 to overhaul Japan’s defense strategy and raise spending.

The overall budget request may rise once additional costs to support the realignment of US military forces on the island of Okinawa are included later.

The latest budget request comes as Japan continues to raise concerns over increasing activity by Chinese ships and aircraft around Japan and nearby Taiwan. In June, Tokyo complained to Beijing after a Chinese fighter jet tailed a Japanese patrol aircraft, flying as close as 45 meters from the aircraft. The same month, China sent two aircraft carriers and supporting warships to operate near remote Japanese islands.

In its annual defense white paper in July, Tokyo highlighted other incidents, including the incursion of a Chinese military aircraft into Japanese airspace in August last year.

in 2022, Japan pledged ¥43 trillion to a military build-up that would span five years, pushing the defense budget and related spending to around 2% of gross domestic product from 1% that year.

Japanese officials say there’s been no direct request from the US for more ambitious defense spending. However, US Defense Secretary Pete Hegseth said at a security conference in late May that US allies in Asia should boost such spending, warning that more urgency is needed to prepare for a potential Chinese invasion of Taiwan.

“NATO members are pledging to spend 5% of their GDP on defense — even Germany,” Hegseth said at the Shangri-La Dialogue in Singapore. “So it doesn’t make sense for countries in Europe to do that while key allies in Asia spend less on defense.”

Japan has already moved to include spending on the coast guard, infrastructure and other items related to national resilience as part of its overall calculation of defense spending.

In April, Nakatani said that under this broader definition of defense spending, total outlays for the current fiscal year were expected to reach ¥9.9 trillion, equivalent to 1.8% of Japan’s GDP in 2022.