Japan has eased its arms export rules, breaking with eight decades of pacifist foreign policy. The announcement by Tokyo comes as Washington’s allies ramp up their military spending, as trust in US President Donald Trump declines, with him wavering on security commitments to allies and the wars in Iran and Ukraine. Japan’s announcement also comes just months after it announced a record-high new defence budget.
Will Japan’s arms industry gain from all this? Late last year, Japan’s government approved a record defence budget of more than 9 trillion yen ($58bn) for 2026, reflecting a push to strengthen military and coastal defences amid rising global tensions. The new budget forms part of a broader 122.3 trillion yen ($784bn) national budget for the fiscal year beginning in April 2026.
The increase also marks the fourth year of Japan’s five-year effort to increase defence spending to 2 percent of gross domestic product (GDP). Under the new budget, more than 970 billion yen ($6.2bn) is earmarked to enhance Japan’s “standoff” missile capabilities. This includes 177 billion yen ($1.13bn) for the purchase of domestically produced and upgraded Type-12 surface-to-ship missiles, which have an estimated range of about 1,000km (620 miles).
Japanese Prime Minister Sanae Takaichi told local media last November that one of the main reasons for increasing the country’s defence budget was that the country might have to become militarily involved, if China were to invade Taiwan, the self-governing island territory claimed by Beijing. These comments soured relations between Tokyo and Beijing. China also began expanding its military drills close to Japan and in the Asia Pacific, stirring Tokyo to advance its defence budget and capabilities.
Besides a higher defence budget, this week Tokyo announced it would ease restrictions on its arms sales, after decades of isolation from the global arms markets since World War II. This means that defence companies in the country will be able to supply arms to other nations. According to a news agency report on Monday, Japan’s key defence contractors, Toshiba and Mitsubishi Electric, said they are hiring staff and adding capacity to capitalise on demand for arms.
Countries such as the Philippines and Poland are expected to become customers of Japanese arms. In recent years, Japan and the Philippines have deepened military ties, with Tokyo agreeing to supply patrol boats and radio gear to Manila. Two Japanese officials told that one of the first deals Takaichi’s government will likely approve are exports of used frigates to the Philippines, which is locked in maritime confrontation with Beijing in the South China Sea.
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