Japan’s long-dormant defense industry is finally waking up. Constrained by a constitution imposed by the Allied military occupation after World War II, Japan has for decades adhered to a pacifist security policy. It technically maintains no military (though its Self-Defense Forces are more formidable than many foreign militaries) and, until last month, the government had forbidden the export of lethal weaponry. Cultural attitudes have reinforced Japan’s pacifism: Japanese citizens have historically derided hawkish politicians and defense firms as “merchants of death.”

These constraints on defense production have taken their toll. Japan is almost entirely dependent on the United States as a guarantor of its security and as a provider of military equipment. Japan’s defense industry is sclerotic and uncompetitive, in part, because the cash-strapped Self-Defense Forces had been its only customer. The disintegration of the defense industrial base—and thus Japan’s ability to arm itself in wartime—once seemed irreversible.

Today, that status quo is beginning to erode, and with remarkable speed. Politically and culturally, Japan is realigning around a very different vision of defense, one more in tune with the industrial policies and security challenges of the day. Stigma around defense production has been eclipsed by concern over Chinese aggression and fear that the rules-based order is showing cracks. After decades of association with the country’s past militarism, Japan’s defense industry is experiencing a renaissance. If the country can overcome its lack of capacity, poor cybersecurity, and economic dependence on China, it could redefine its own security and reshape the global market for arms.

Successive American ambassadors have pleaded with Japan for years to take its security more seriously. Japan’s approach has finally started to shift, a consequence of Chinese assertiveness, waning confidence in America’s security guarantees, and a fear that what happened to Ukraine could happen to a country in Asia. Chinese aggression now routinely tops Japanese opinion polls of national security concerns, surpassing even North Korean missile threats. In the event of escalation in the Taiwan Strait, U.S. and Japanese defense planners are united in their belief that Japan’s military in its current state would be insufficient to meet the challenge, and that Japan’s missile stockpiles and defense manufacturers could not sustain a prolonged conflict.

Japan is in its fourth year of a five-year graduated commitment to doubling the national defense budget, from roughly $35 billion in 2022 to about $60 billion by 2027. In absolute terms, Japan is now the ninth-biggest military spender in the world. Government contracts are now big enough for defense firms to turn a profit, and more companies are angling for a shot at a lucrative procurement deal.

Japan has already started pursuing ambitious defense projects in recent years. The Ministry of Defense’s Acquisition, Technology and Logistics Agency is jointly developing a sixth-generation stealth fighter with Italy and the United Kingdom. Japan’s defense industry titan, Mitsubishi Heavy Industries, is in the process of building a new hypersonic glide vehicle, effectively the country’s........

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