The country's defense spending in 2023 rose by the most in at least 70 years.

Since 2017, Japan’s spending on defense has been rising faster than its gross domestic product. The 2023 budget for the armed forces, known as the Japan Self-Defense Forces, was 26 percent higher than the previous year’s sum – the largest nominal increase in the country’s military spending since at least 1952. It was the first since Tokyo unveiled its new National Security Strategy, which includes a target to bring military spending up to 2 percent of GDP by 2027. The introduction of this new target is a significant shift from Japan’s postwar defense policy, which capped military spending at 1 percent of GDP and significantly restricted the JSDF’s capabilities.

The main reason for this fundamental change is the worsening security environment in the Indo-Pacific region, specifically China’s assertive activities and the nuclear threat North Korea poses. Russia’s increased aggressiveness is also unsettling Japanese officials. To prepare for these growing threats, Tokyo plans to acquire new counterstrike capabilities, update the JSDF’s maritime and air systems, and improve self-reliance by encouraging the Japanese arms industry to expand its domestic manufacturing and maintenance capacity. Currently, Japan is capable of producing all of its planned military ships and almost 90 percent of its planned land systems, but it relies on the United States for many aircraft and missiles.