Japan Unveils Record Defence Budget Amid Rising China Tensions and Taiwan Fallout
Japan is moving to significantly strengthen its military posture following several weeks of escalating diplomatic and security tensions with China, with fresh budgetary plans pointing to the country’s largest-ever defence allocation.
PulseNets learnt that the draft budget for the 2026 fiscal year, endorsed by the Japanese Cabinet on Friday, proposes a 3.5 per cent increase in defence spending, pushing military expenditure to nearly 9 trillion yen, equivalent to about $58 billion.
According to details obtained by PulseNets, roughly 100 billion yen has been set aside for the development of a new defence architecture known as Shield, a system designed to safeguard Japan’s extensive coastline and remote island territories from threats posed by ships, submarines and unmanned aerial vehicles.
This renewed military expansion comes amid rising strain in relations with Beijing, particularly following comments made in November by Prime Minister Sanae Takaichi on the sensitive Taiwan issue.
Speaking at the time, Ms Takaichi warned that any military action by China against the self-governed island would represent “a direct and existential danger to Japan”, adding that such a scenario could compel Tokyo to invoke its constitutional right to self-defence.
PulseNets reported that China reacted swiftly and forcefully to the remarks, issuing strong diplomatic rebukes, releasing travel advisories, cancelling some flight routes and imposing a ban on Japanese seafood imports.
Tensions were further heightened by Japan’s plan to deploy missile units on Yonaguni Island, located less than 110 kilometres from Taiwan, a move that reportedly drew sharp reactions from Beijing.
Tokyo has also lodged formal protests in recent weeks after Chinese military aircraft were accused of locking Japanese fighter jets with specialised radar systems near the southern Okinawa island chain. Chinese authorities, however, rejected the claims, insisting that no provocative action took place.
Beyond defence, PulseNets learnt that the overall draft budget for the fiscal year starting April 1 stands at a record 122.3 trillion yen, largely aimed at funding rising social welfare costs as Japan’s population continues to age rapidly.
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Despite historically high tax revenues, the government is expected to rely on additional bond issuances to close funding gaps, a strategy that has raised concerns among economists and investors.
Analysts who spoke to PulseNets noted that Ms Takaichi’s expansive fiscal and defence agenda has added pressure on the yen in foreign exchange markets, even as Japan grapples with a national debt burden that already exceeds twice the size of its annual gross domestic product.
(dpa/NAN)
