Japan's Defense Spending to Exceed 3% of

📡 THE SIGNAL — What Happened

Why it matters: Japan's submission of a bill to raise defense spending to over 3% of GDP signifies a fundamental shift from the "exclusive defense and light armament" policy maintained for 80 years since the end of World War II. This marks a watershed moment that will irreversibly alter the military balance in the Asia-Pacific, transforming the world's third-largest economy into one of the world's leading military powers.

• Policy — The Japanese government has submitted a bill to parliament to raise defense spending to over 3% of GDP, significantly exceeding the current 2% GDP target (scheduled for achievement in FY2027).
• Fiscal — 3% of GDP corresponds to approximately 18 trillion yen, more than double the current approximately 8 trillion yen (FY2025 budget). If realized, Japan would become the world's third-largest military spender.
• Security Environment — The intensification of US-China rivalry, tensions in the Taiwan Strait, the advancement of North Korea's nuclear and missile development, and the prolonged Russian invasion of Ukraine are the backdrop to the bill's submission.
• History — Since the Miki Cabinet's 1976 cabinet decision to cap defense spending at 1% of GDP, this level has functioned as a de facto ceiling for approximately 50 years. The decision to raise it to 2% was only made in the three security documents of 2022.
• Alliance Relations — The United States has been demanding that allies bear defense costs of 2% of GDP or more, with pressure intensifying under the Trump administration to raise this to 3-5%.
• Equipment — The increased funds are expected to be allocated to standoff defense capabilities (long-range missiles), integrated air and missile defense, space, cyber, and electromagnetic domains, and unmanned aircraft/AI weaponry.
• Domestic Politics — Even within the ruling party, there are cautious voices regarding securing funding, with opinions divided between tax increases and bond issuance. Opposition parties oppose the move as a "deviation from exclusive defense."
• Constitution — Constitutional scholars have raised doubts about its consistency with Article 9 of the Constitution, and there are concerns about the risk of unconstitutionality lawsuits.
• Industry — Share prices of defense-related companies such as Mitsubishi Heavy Industries, Kawasaki Heavy Industries, and IHI have risen. Strengthening the defense industrial base is positioned as a national strategy.
• Diplomacy — China's Foreign Ministry strongly reacted, stating it would "undermine regional peace and stability." South Korea also expressed vigilance due to historical reasons.
• Public Opinion — A public opinion poll in early 2026 showed approximately 55% in favor of increasing defense spending and approximately 35% against, indicating majority support, but opinions are divided on exceeding 3%.
• Funding — Corporate tax increases, diversion of the special income tax for reconstruction, and the creation of "defense bonds" (a defense version of construction bonds) are being discussed as potential funding sources.

To understand the figure of Japan's defense spending exceeding 3% of GDP, it is necessary to delve deeply into the historical context of Japan's post-war security policy.

After its defeat in 1945, Japan, under the occupation of the Supreme Commander for the Allied Powers (GHQ), enacted a new constitution, explicitly stating "the renunciation of war" and "the non-possession of war potential" in Article 9. This was an unprecedented experiment in world history, where a defeated nation voluntarily abandoned its military power. However, with the outbreak of the Korean War in 1950, the National Police Reserve was established under MacArthur's directive, and it was reorganized into the Self-Defense Forces in 1954. At this point, a fundamental contradiction between the constitution and reality had already emerged.

During the Cold War, Japan adopted a policy known as the "Yoshida Doctrine." This strategy involved relying on the US nuclear umbrella under the Japan-US Security Treaty, while minimizing its own military expenditure and concentrating resources on economic growth. The Miki Takeo Cabinet's cabinet decision in 1976 to cap defense spending at 1% of GDP was the institutionalization of this policy. This "light armament and economic focus" policy became a crucial pillar supporting Japan's rapid economic growth and established its brand as a "peaceful nation" in the international community.

After the end of the Cold War, Japan's security environment changed incrementally. In the 1990s, the Gulf War drew criticism as "checkbook diplomacy," leading to the enactment of the PKO Cooperation Law. After the 9/11 terrorist attacks in 2001, Japan conducted refueling activities in the Indian Ocean under the Anti-Terrorism Special Measures Law, and in 2003, dispatched the Self-Defense Forces to Samawah under the Iraq Special Measures Law. In 2015, the Abe administration enacted security-related legislation, enabling the limited exercise of collective self-defense. All of these were gradual expansions within the framework of the constitution.

The turning point was the cabinet decision on the three security documents (National Security Strategy, National Defense Strategy, Defense Buildup Program) in December 2022. For the first time, the possession of "counter-strike capability" (enemy base attack capability) was explicitly stated, and an increase in defense spending to 2% of GDP was decided. This effectively meant the abolition of the 1% cap and was considered the biggest shift in post-war defense policy.

However, the proposal for a further increase from 2% to over 3% in just over three years is driven by multiple factors. First, the structuralization of US-China rivalry. Since the 2020s, China's military activities in the Taiwan Strait, South China Sea, and East China Sea have rapidly expanded in both quality and quantity. China's defense budget, on a publicly announced basis, has reached approximately 1.6 trillion yuan (about 30 trillion yen), and is actually estimated to be 1.5-2 times that amount. For Japan, China's military rise has come to be recognized as a threat directly linked to "situations threatening Japan's survival."

Second, the sophistication of North Korea's nuclear and missile capabilities. Since 2022, North Korea has accelerated the development of solid-fuel ICBMs and hypersonic missiles, and increased the deployment of medium-range ballistic missiles capable of reaching all of Japan. Furthermore, deepening military cooperation with Russia raises concerns about potential technology transfer.

Third, Russia's invasion of Ukraine presented the reality of "changing the status quo by force." As European nations rush to exceed the NATO standard of 2%, with Poland aiming for 4% and the Baltic states for over 3%, a wave of defense spending increases is occurring across the entire Western alliance. Japan cannot remain unaffected by this trend.

Fourth, the redefinition of alliance relations due to the potential return of the Trump administration. President Trump has strongly demanded a "fair share of burden" from allies, effectively requiring Japan to increase its GDP ratio to 3% or more. The necessity to respond to criticisms of "free riding" on the Japan-US alliance has become an undeniable pressure for Japanese policymakers.

Considering this historical context, the figure of over 3% of GDP is not merely a budgetary issue but signifies a transformation of Japan's post-war identity itself. This transformation from a "peaceful nation" to a "normal nation," and further to a "proactive defense nation," holds the potential to fundamentally shake the geopolitical order of East Asia.

The delta: Japan's submission of a bill to leapfrog from 1% to over 3% of GDP in just four years, after maintaining a "light armament policy" at 1% of GDP for half a century, indicates that the speed of change in the security environment has overwhelmed the "inertia" of policy change. This is not merely a budget expansion but a fundamental redefinition of Japan's post-war national identity and a structural transformation that could irreversibly change the security architecture of East Asia.