Japan is preparing to further strengthen its defence capabilities by expanding the use of drones, artificial intelligence (AI) and advanced missile systems as it responds to a rapidly changing security environment.
The country’s Defence Ministry has submitted an ¥8.9 trillion defence budget request for the fiscal year beginning April 2027, slightly higher than the ¥8.8 trillion requested for the current fiscal year. The final figure is expected to be determined later this year after Prime Minister Sanae Takaichi’s government approves updated security and defence strategies.
Under Japan’s five-year defence plan introduced in 2022, the country has increased defence spending to around two per cent of gross domestic product (GDP), while expanding the role of its Self-Defense Forces. The move is largely aimed at strengthening Japan’s ability to respond to growing regional security concerns, particularly China’s increasing military assertiveness.
The ministry said modern conflicts, including lessons from the war in Ukraine, have demonstrated the growing importance of unmanned systems. Japan therefore plans to develop and mass-produce relatively low-cost uncrewed weapons, which officials believe could reduce costs, minimise casualties and create a more efficient defence network.
Among the proposals is the deployment of attack drones alongside long-range missiles. Japan is seeking funding to acquire unmanned attack drones capable of being launched from both above and beneath the water, although the ministry has yet to disclose the exact amount required.
The increased reliance on unmanned systems could also help Japan address its shrinking military workforce as the country faces an ageing and declining population. However, experts have warned that developing a fully domestic drone industry could prove challenging because Japan’s commercial drone market is heavily dependent on imports from China.
Japan has also continued strengthening its military presence in its southwestern region, including through the deployment of longer-range missiles and interceptor systems. The Defence Ministry is now seeking to develop hypersonic missiles that could be launched from submarines to further enhance its counterstrike capability.
AI is another major component of the proposed defence overhaul. The ministry plans to introduce an integrated AI platform for command and control, which could assist military personnel in analysing battlefields and selecting targets more quickly and accurately.
Japan is considering the use of existing foreign AI technologies, including systems developed in the United States, while simultaneously investing in domestic AI capabilities. Officials are also exploring an “AI orchestrator” capable of integrating several AI systems and autonomously selecting and operating the most suitable technology.
A dedicated “Defence Ministry cloud” is also planned to support the secure transmission of sensitive information and maintain reliable communications during emergencies or disasters.
Beyond battlefield technology, Japan is looking to strengthen its domestic defence manufacturing capabilities. Officials said a stable supply of military equipment is essential for deterrence, particularly amid concerns that private suppliers could withdraw from the industry and create shortages.
To address this, the ministry is seeking funding for a state-owned, contractor-operated system under which the government could acquire factories and outsource their operation to private companies. Additional support would also be provided to businesses involved in defence-related research, development and manufacturing restructuring.
Japan’s defence expansion has already benefited major contractors such as Mitsubishi Heavy Industries, Kawasaki Heavy Industries and IHI Corp, whose profits have increased alongside higher military spending and growing arms exports.
However, Japan’s defence industry continues to face structural challenges. Dozens of companies have withdrawn from the sector over the years because of weak profits, uncertain business prospects and concerns about reputational damage associated with producing weapons, particularly lethal systems.
The latest proposals reflect Japan’s broader effort to modernise its military capabilities while dealing with demographic pressures and an increasingly complex regional security landscape.
