Japan's Cabinet approved a record draft defence budget of 9.04 trillion yen ($58 billion) for the fiscal year 2026 amid tensions with China, local media reported on Friday.
The draft budget for fiscal 2026 beginning in April, which includes costs related to hosting US military bases, surpasses the previous record of 8.7 trillion yen ($55.7 billion) allocated for the current fiscal year ending in March 2026, according to Kyodo news agency.
Fiscal 2026 marks the fourth year of Japan’s five-year 43-trillion-yen ($275 billion) defence buildup plan.
Under the plan, 100.1 billion yen ($641 million) has been earmarked to develop the “Shield” layered coastal defence system incorporating aerial, surface and underwater vehicles.
The country is also increasing its investment in drone technology, including 1.1 billion yen ($7 million) to assess long-endurance drones to counter airspace violations.
To strengthen its space capabilities, Japan plans to rebrand the Air Self-Defence Force as the Air and Space Self-Defence Force, allocating another 1.1 billion yen to acquire equipment to monitor satellite interference.
The budget also includes 30.1 billion yen ($193 million) to procure hypersonic guided missiles as a counterattack capability.
Earlier, the Cabinet of Prime Minister Sanae Takaichi also approved a draft initial state budget totaling 122.3 trillion yen ($783 billion) for the fiscal year starting next April, the largest in the country’s history.
Japan’s defence buildup comes as tensions with China have escalated since November 7, when Takaichi said a Chinese attack on Taiwan could legally constitute a “survival-threatening situation,” potentially allowing Japan to exercise the right of collective self-defence.
Her remarks triggered a massive backlash from Beijing, with China advising against travel to Japan and re-imposing a ban on imports of seafood, among other restrictive measures.
