Japan’s Record $59B Defense Budget Targets AI and Unmanned Systems

Japan’s defense budget request reflects growing regional tensions: Japan’s Defense Ministry has sought a record 8.5 trillion yen ($59 billion) budget for 2025, marking the third year of a rapid five-year military buildup plan amid increasing threats from China.

Key objectives of the budget request:

• The budget aims to fortify deterrence on southwestern islands against China’s growing military presence in the region
• It focuses on developing unmanned weapons and AI systems to compensate for the declining number of servicemembers due to Japan’s shrinking population
• The request is part of Japan’s plan to double its annual military spending to around 10 trillion yen by 2027, potentially making it the world’s third-largest military spender after the United States and China

Regional context and strategic priorities:

• Japan has been rapidly building up defenses in its southwestern region in response to China’s increasing military activities and territorial disputes in the East and South China Seas
• A significant portion of the budget (970 billion yen) is allocated for enhancing strike-back capabilities, including the development and purchase of long-range missiles
• Approximately one-third of the budget is dedicated to a satellite constellation aimed at improving detection of missile-related activities, particularly in response to hypersonic missile developments by North Korea, China, and Russia

Addressing manpower challenges:

• Japan’s Self-Defense Force (SDF) is struggling with recruitment and retention, fulfilling only half of its recruiting target last year
• The budget request includes investments in unmanned systems and AI to offset the declining troop numbers
• 103 billion yen is allocated for developing and purchasing surveillance and combat drones, which are seen as “game changers” in military operations
• 314 billion yen is requested for building three new multi-purpose compact destroyers with reduced crew requirements

Technological focus and modernization efforts:

• The defense ministry is emphasizing the development of combat drones as a main pillar of Japan’s military buildup
• 18 billion yen is requested for implementing AI surveillance systems at 40 SDF bases across Japan
• 4.3 billion yen is allocated for automated supply storage in Okinawa, set to launch in 2027

Human resource challenges and proposed solutions:

• The ministry acknowledges the difficulty in attracting young applicants and retaining mid-career personnel
• An interim report on human resources highlights the need for organizational reforms to adapt to new ways of fighting while strengthening defense capabilities
• Proposed improvements include better salaries, enhanced working environments, increased training opportunities, and support for working mothers to attract more women to the SDF

Addressing internal issues:

• The defense ministry has faced recent scandals involving sexual assaults, harassment, and abuse of power
• Internal investigations have criticized cover-up attempts and a lack of responsibility among supervisors
• The ministry has also come under scrutiny for leaks of classified information and corruption scandals

Broader implications: Japan’s record defense budget request signals a significant shift in its military posture and regional strategy. While aimed at countering perceived threats from China and North Korea, this rapid military expansion could potentially alter the balance of power in East Asia and impact diplomatic relations with neighboring countries. The focus on unmanned systems and AI also reflects a broader trend in modern warfare, as nations grapple with demographic challenges and the evolving nature of conflict.