Japan’s Defense Ministry is preparing to request an annual budget of around ¥8.8 trillion ($59.8 billion) for fiscal year 2026, according to government sources. The figure would mark another record high as Tokyo continues a major military buildup in response to regional security challenges.
Fiscal 2026, beginning in April, will be the fourth year of Japan’s five-year, ¥43 trillion ($292 billion) defense buildup plan. The initiative seeks to raise combined defense-related spending, including allocations for the coast guard and contributions to U.N. peacekeeping toward 2 percent of gross domestic product.
Focus on Unmanned Systems
A central element of the buildup plan is the development of unmanned defense capabilities. The ministry has already allocated about ¥400 billion ($2.7 billion) for unmanned systems during the first three years of the program and plans to spend around ¥1 trillion ($6.8 billion) by fiscal 2027. Aerial drones are seen as a key capability to counter China’s growing military presence and North Korea’s missile threat.
Japan’s defense outlays under the buildup program have steadily increased: ¥6.8 trillion ($46.2 billion) in fiscal 2023, ¥7.9 trillion ($53.7 billion) in fiscal 2024, and ¥8.7 trillion ($59 billion) in the current fiscal year. The Defense Ministry is expected to finalize its FY2026 request by the end of August.
Record 2025 Budget
Last year, Japan approved a record ¥8.7 trillion (about $55 billion at 2024 exchange rates) defense budget for FY2025 as part of the same buildup effort. That plan included funding for long-range strike capabilities such as U.S.-made Tomahawk cruise missiles, enhanced missile defense systems, new Mogami-class destroyers, and next-generation fighter development with the United Kingdom and Italy.
The 2025 budget also dedicated resources to artificial intelligence, unmanned platforms, and measures to improve working conditions for Self-Defense Forces personnel, reflecting challenges in recruitment and retention.
For decades, Japan capped defense spending at about 1 percent of GDP. That policy changed with the government’s 2022 revision of its three key security documents, which outlined a shift toward acquiring counterstrike capabilities and significantly increasing defense outlays.
The FY2026 request, if approved, would continue this trajectory, cementing Japan’s move away from its traditional postwar spending constraints.