Asia Defense | Security | East Asia

Japan’s Record 2027 Defense Budget Request Is Only the Opening Bid

Tokyo is building a force around AI, unmanned systems, a high-low weapons mix, and greater staying power.

The destroyer JS Kaga, the second ship of the Izumo class.

Japan’s Ministry of Defense on August 31 submitted a record fiscal year 2027 budget request of roughly 8.9 trillion yen ($55.5 billion). But the headline figure tells only part of the story.

At a media briefing three days before the announcement, Defense Ministry officials said around 160 entries in the request were marked as “item requests” (jiko yokyu), for which no specific funding amount has yet been assigned. The reason is that Prime Minister Takaichi Sanae’s government plans to revise Japan’s three key security documents – the National Security Strategy, National Defense Strategy, and Defense Buildup Program – by the end of 2026. Even procurement quantities for some major equipment could change as part of that review.

The 8.9 trillion yen figure should therefore be seen less as a final price tag than as an opening bid. The budget request will be sent to the Finance Ministry for consideration before a decision is made in late December. The fiscal 2027 budget is set to mark a 15th consecutive annual increase and a 13th consecutive record high, with the final figure widely expected to exceed 10 trillion yen for the first time.

Fiscal year (FY) 2027 is the final year of Japan’s current five-year Defense Buildup Program, which set total defense spending at roughly 43 trillion yen from FY2023 through 2027. But ministry officials said the security environment has changed with greater speed and complexity than anticipated when the current documents were drafted. The request is therefore not simply about completing the existing buildup. It is a bridge to the next phase of Japan’s defense transformation.

The ministry organized the request around three main pillars and nine priority areas. The first, adapting to “new ways of warfare,” covers AI, unmanned systems, stand-off capabilities, integrated air and missile defense, space, and cyber. The second focuses on sustained response capabilities, including Pacific and sea-lane defense, while the third centers on the foundations of defense, including the defense industrial and technological base and personnel.

Artificial intelligence and unmanned systems are central to that transformation. The ministry plans an AI-based decision-support system for the Self-Defense Forces’ (SDF) Joint Operations Command, together with a next-generation AI platform and secure cloud infrastructure. The request also includes UAVs for intelligence, surveillance, reconnaissance, and targeting, attack UAVs, small unmanned ground vehicles, and research into a stand-off missile launch module for unmanned underwater vehicles.

Another major investment is Japan’s next-generation fighter, which is being jointly developed with the United Kingdom and Italy under the Global Combat Air Program (GCAP). The ministry’s Acquisition, Technology, and Logistics Agency (ATLA) requested 234 billion yen ($1.5 billion), plus an item request, to push ahead with the fighter program. The funding will support Japan’s contribution to the GCAP International Government Organization (GIGO), joint design work, and the maturation of technologies Japan is developing independently.

ATLA also requested 9.7 billion yen ($61 million), plus an item request, to accelerate research and development of collaborative unmanned aircraft equipped with deception and electronic warfare capabilities and capable of autonomous decision-making while operating alongside the next-generation fighter.

The emphasis on cost and quantity is........

© The Diplomat