TOKYO – Japan’s Ministry of Defense has laid out its preliminary 8.9 trillion yen ($55.6 billion) defense budget request for the 2025 fiscal year, outlining a sweeping shift toward integrating cutting-edge uncrewed weapons, artificial intelligence and modern combat tactics into the country’s national defense strategy. The request represents only a minor uptick from the 8.8 trillion yen proposal for the current fiscal year, but the final total is expected to grow substantially later in 2024, after Prime Minister Sanae Takaichi’s cabinet signs off on an updated national security and defense framework focused on expanding Japan’s counterstrike capabilities.
This new investment push aligns with a 2022 five-year defense roadmap that committed Japan to doubling its defense outlay to 2% of gross domestic product, a major shift that redefines the Japan Self-Defense Forces (JSDF) to take on a more robust offensive posture in response to China’s growing regional influence. Beijing has repeatedly pushed back against this military buildup, labeling it a resurgence of dangerous 20th century Japanese militarism.
In official briefing materials accompanying the budget request, the Defense Ministry emphasized that the core goal of this proposal is to deliver a “transformative overhaul of defense capability” to drastically strengthen deterrence and response capacities, drawing direct lessons from the widespread use of drones in the ongoing war in Ukraine.
### Uncrewed Weapons to Cut Costs, Offset Demographic Decline
A central pillar of the new strategy is the domestic development and mass production of low-cost uncrewed weapons systems. Defense officials argue that these tools will not only reduce operational costs and troop casualties, but also help build a far more cost-effective layered air defense network.
Under the plan, attack drones will operate in coordinated tandem with long-range cruise missiles to amplify the effectiveness of counterstrike operations. The ministry has also requested unspecified funding to develop submarine-launched and underwater-deployed attack drones by the 2027 fiscal year. Beyond combat effectiveness, uncrewed systems are seen as a critical solution to Japan’s growing demographic crisis: a rapidly aging and shrinking population has driven a steady decline in available military personnel, a gap drones can help fill.
Despite these ambitions, defense industry experts note a major barrier to full domestic drone production: Japan’s commercial drone market is currently dominated by Chinese imports, and building a competitive, fully homegrown supply chain will require years of targeted investment and policy support. The proposal also continues Japan’s multi-year effort to fortify its southwestern island chain near disputed regional territories, with additional funding for extended-range missiles and defensive interceptor systems, alongside new research into submarine-launched hypersonic weapons to further boost counterstrike capacity.
### AI Integration to Modernize Command and Control
To match the new generation of weapons technology, the Defense Ministry is rolling out a major overhaul of its command and decision-making infrastructure through the integration of artificial intelligence. The core of this push is a planned next-generation system called the “AI orchestrator,” a unified platform that will integrate multiple independent AI tools to enable autonomous system selection and operational management. The goal is to drastically cut down decision-making time and improve accuracy across core battlefield functions, from situational assessment to target selection.
Officials confirmed Japan is exploring multiple pathways for AI development: it may adapt proven foreign AI technologies (including systems developed by the United States), scale up indigenous AI research, or combine the two approaches to meet JSDF requirements. The ministry also plans to build a purpose-built “Defense Ministry cloud” infrastructure to enable secure transmission of highly sensitive classified data and maintain stable communications during emergencies or large-scale natural disasters. No specific cost estimates for these AI and digital infrastructure projects have been released publicly.
### Government Intervention to Strengthen a Stagnant Domestic Defense Industry
To sustain long-term military modernization, Japanese officials have also identified a critical need to shore up the country’s domestic defense industrial base. For decades, the sector has struggled under multiple constraints: Japan’s post-war constitution limits military activity to self-defense only, creating an uncertain business outlook for arms manufacturers. Poor profit margins, combined with reputational risks associated with producing lethal weapons, have driven dozens of major suppliers to exit the defense sector over the past 50 years.
While recent military expansion has lifted profits at Japan’s largest defense contractors, including Mitsubishi Heavy Industries, Kawasaki Heavy Industries and IHI Corp., the broader supply chain remains fragile and at risk of critical component shortages if existing suppliers exit the market.
To address this risk, the Defense Ministry has requested unspecified funding to launch a new public-private production framework: the government will own key defense manufacturing facilities, while contracting out day-to-day operations to private sector firms. This model is designed to guarantee stable production and supply of critical defense equipment. The budget request also includes targeted funding to support private companies’ defense research and development, as well as corporate restructuring to improve production efficiency and competitiveness across the sector.