Japan is weighing a major military buildup as China’s growing power and the risk of a Taiwan conflict raise concerns about nearby Japanese islands and vital sea lanes; the government is expected to revise its national security strategy and defense plan by year-end.

Against that backdrop, the Finance Ministry has proposed spending 50 trillion to 60 trillion yen on defense over the five years beginning April 2027, above the current 43 trillion yen plan but well below the 80 trillion yen sought by some defense officials and ruling-party lawmakers.

Even the top of that range would leave Japan short of its goal of spending 2% of GDP on defense, according to Reuters calculations, as US President Donald Trump presses allies to increase military outlays.

Finance Ministry officials say a larger increase would be hard to fund alongside Sanae Takaichi’s economic-growth investments and proposed food sales-tax cut, which would leave an annual revenue shortfall of 4.3 trillion yen.

The lower spending proposal could halve planned purchases of some missiles and aircraft, including US-made F-35 stealth fighters, while planned drone orders would not be affected.

Those cuts come as procurement costs rise: a weak yen, inflation and supply bottlenecks have pushed the domestically built Kawasaki P-1 patrol aircraft’s unit price up 50% to 46 billion yen between fiscal 2023 and 2026, while F-35 costs have also increased.

The F-35 program faces additional cost pressures from the complexity of its Block 4 upgrade, engine modernization, processor and display overruns, material shortages and engine inflation; Japan also needs to replace aging F-15J and F-2 aircraft.

Buying from the United States is no quick fix: Japan has 118 undelivered Foreign Military Sales contracts worth 1.14 trillion yen, and delivery of as many as 400 Tomahawk missiles has been delayed by two years amid depleted US stocks.

US inventories are strained by operations against Iran and weapons transfers to Ukraine; a CSIS report estimates roughly two-thirds of prewar Patriot stocks and more than one-third of Tomahawk stocks were expended, with replenishment expected to take years despite planned production increases.

Japan’s own forces face readiness problems, with corrosion and spare-parts shortages leaving only about 30% of the P-1 fleet mission-capable and forcing the Japan Maritime Self-Defense Force to strip some aircraft for parts, potentially weakening maritime surveillance.

The Ministry of Defense has reported sustained Chinese naval and air activity around the Senkaku Islands and through the Miyako Strait; Chinese naval transits through surrounding straits rose from 13–22 a year in fiscal 2011–2014 to 42–52 in fiscal 2022–2025.

Expanding domestic production will be difficult because Japan’s defense industry has limited capacity, engineering talent, export experience and cybersecurity readiness after decades of underinvestment, while reliance on Chinese components and China-dependent commercial markets adds complications.