On Thursday, Japan‘s defense ministry requested a historic budget allocation of 7.7 trillion yen ($52.67 billion) for the fiscal year 2024. This request is part of Prime Minister Fumio Kishida’s strategy to increase military expenditure by 43 trillion yen over a five-year period.
The request coincides with a significant deterioration in Japan’s relations with China. Just last week, Japan commenced the disposal of treated radioactive water from its damaged Fukushima nuclear facility into the ocean. This action was strongly criticized by China, which responded by imposing a ban on imports of Japanese seafood.
Image Source: Bloomberg
Japan’s tensions with China and North Korea
Earlier this year, U.S. officials reiterated their dedication to Japan’s intention to significantly increase defense spending, a move driven by escalating tensions with China and North Korea. This marks a significant shift from decades of limited investment since World War II. However, despite the backing of the United States and other allies, the success of Prime Minister Fumio Kishida’s initiative to transform Japan’s Self-Defense Forces into a fully capable army for countering regional threats depends on the willingness of the Japanese population to both fund and staff this expansion.`
The change is clear as for the fiscal year 2024 budget request, which has been submitted to the Ministry of Finance, represents an addition of nearly one trillion yen to the previous year’s budget of 6.8 trillion yen. This marks an increase of approximately 13%. If granted approval, this budget will mark the second consecutive year of unprecedented spending growth, with an additional one trillion yen compared to the previous year.
Last year, Prime Minister Fumio Kishida announced that his government would refrain from increasing taxes for the upcoming fiscal year instead, they plan to implement gradual tax hikes leading up to fiscal 2027 to secure the necessary funding for enhancing the defense budget which a bunch of Japanese protested against.
