Japan’s Defense Ministry has proposed a record-breaking budget of 8.5 trillion yen ($59 billion) for the upcoming year, aimed at strengthening its defense capabilities in the face of growing security challenges. The proposed budget is part of Japan’s ongoing effort to reinforce its defenses, especially on its southwestern islands, in response to increasing threats from China and other regional actors. The budget focuses heavily on integrating unmanned weapons, artificial intelligence, and advanced missile defense systems to offset the declining number of servicemembers caused by the country’s shrinking population.
Third Year of Japan’s Military Buildup Plan
The 2025 budget proposal marks the third year of Japan’s five-year military buildup plan, designed to bolster its defense posture in line with its current security strategy. By 2027, Japan aims to invest a total of 43 trillion yen ($297 billion), effectively doubling its annual military spending to approximately 10 trillion yen. This increase would make Japan the world’s third-largest military spender, following the United States and China. The proposal, approved by the Defense Ministry, will now be submitted to the Finance Ministry for review, with negotiations expected to continue through December.
Rising Tensions in the Region
Japan’s defense strategy is driven by escalating tensions in the region. China has been increasingly assertive, engaging in frequent clashes with Philippine coast guards in the South China Sea and sending coast guard vessels into Japanese-controlled territorial waters around the disputed East China Sea islands, which Beijing also claims. In response, Japan is looking to enhance its military presence and capabilities in the region.
A significant portion of the proposed budget—970 billion yen ($6.7 billion)—is allocated to enhancing Japan’s strike-back capabilities. This includes developing and acquiring long-range missiles and equipment for their deployment, such as those launched from Aegis-class destroyers. Additionally, one-third of this amount will fund a satellite constellation aimed at detecting missile-related activities, a critical need given the development of hypersonic missiles by North Korea, China, and Russia.
Focus on Drones and AI to Address Labor Shortages
Japan’s shrinking and aging population has led to a decline in available servicemembers, prompting a shift toward unmanned and automated technologies. The country has requested 103 billion yen ($710 million) to invest in drones for both surveillance and combat purposes. Japanese defense officials have described drones as “game changers,” capable of undertaking extended missions and reducing the risk of human casualties.
Furthermore, the budget request includes 314 billion yen ($2.17 billion) for constructing three new multi-purpose compact destroyers. These new ships will require only 90 crewmembers, less than half the number needed for current vessels.
Japan is also turning to artificial intelligence to address manpower shortages. The ministry has asked for 18 billion yen ($124 million) to introduce AI surveillance systems at 40 Self-Defense Force (SDF) bases across the country, potentially freeing up 1,000 personnel for other duties. Additionally, 4.3 billion yen ($29.7 million) is allocated for an automated supply storage facility, expected to launch in Okinawa in 2027.
Challenges in Recruiting and Retention
Japan’s Self-Defense Force (SDF) is struggling to maintain its troop levels, currently capped at 247,000 personnel. Last year, the SDF met only half of its recruitment target of 19,598, the lowest level in its 70-year history. Meanwhile, 6,258 mid-career personnel left the force, the highest number in 30 years.
The Defense Ministry’s interim report on human resources, also released on Friday, highlighted the severe recruitment challenges. “Due to declining childbirths and a shrinking working-age population, Japan is inevitably facing a serious labor shortage,” the report stated. The ministry emphasized the need to build a defense organization that can operate in new ways while strengthening overall defense power.
Moving Forward
As Japan grapples with these challenges, the country is determined to modernize its military capabilities and improve its readiness to respond to regional threats. The proposed defense budget reflects Japan’s strategic shift towards technology and innovation to compensate for its demographic challenges, ensuring it remains capable of defending its interests amid a rapidly changing security landscape.
