Japan's Defense Budget May Exceed 10 Trillion Yen? AI and Drones Deployed, Concerns Over East Asia Arms Race

According to a report by Kyodo News on July 7, citing anonymous sources, Japan's Ministry of Defense has applied for a record-high budget of 8.9 trillion yen (approximately NT$1.7817 trillion) for fiscal 2027, with the possibility of increasing to around 10 trillion yen. The budget will primarily be used to counter 'new combat methods,' including the deployment of interception drones and the introduction of artificial intelligence (AI) into the Self-Defense Forces' command systems. However, the report also points out that while this is part of strengthening national defense, there are concerns that it may trigger an arms race in East Asia.

The deadline for the Ministry of Finance to accept budget applications from various ministries is the end of August. The amount applied for by the Ministry of Defense is calculated based on the current 'Defense Force Development Plan,' with the total defense expenditure for fiscal years 2023 to 2027 estimated at approximately 43 trillion yen.

The Ministry of Defense will reflect the contents of the revised three security-related documents (Security 3 Documents) in the 2027 budget proposal. A Japanese government official predicts that 'the final scale may reach 10 trillion yen.'

According to the plan, the Japanese government's procurement of interception drones is intended to counter enemy suicide drones. Since drones are cheaper than anti-aircraft missiles and can be procured in large quantities, they are expected to enhance sustained combat capabilities. The Ministry of Defense aims to combine the development of high-power lasers and microwave technology to build an air defense network.

In addition, the Ministry of Defense will allocate funds for the adoption of AI, analyzing large amounts of data and suggesting attack targets, etc., to assist relevant personnel in making rapid decisions. The Ministry of Defense will also establish a cloud space to store large amounts of confidential information.

The Ministry of Defense's original budget request for fiscal 2026 was initially set at approximately 8.8 trillion yen. However, the 2026 central government general budget, which was passed in April, shows that Japan's defense expenditure for fiscal 2026 is approximately 9 trillion yen, including expenses related to the reorganization of U.S. forces, exceeding the original budget request.