Overview
- The proposal for the fiscal year starting April 1, 2026 totals ¥122.3 trillion and pairs military modernization with higher social outlays.
- Defense spending is set at about ¥9 trillion, roughly 3.5% above the current year, according to the government blueprint.
- Around ¥100 billion is earmarked for a coastal defense system called SHIELD that would deploy drones against hostile targets, with completion targeted for 2028.
- Japan's Defense Ministry describes the regional security environment as the most serious and complex since World War II, citing China and North Korea.
- Markets have shown unease as the yen faces pressure and public debt is projected near 232% of GDP, even as record tax revenues still require new bond issuance.