Anton Petrus | Second | Getty Photos
Japan, famend for its pacifist structure, is now setting its sights on the worldwide arms exports market.
Protection Minister Gen Nakatani earlier this month informed Nikkei that he needed to advertise Japan’s protection exports, signaling a transparent shift within the nation’s arms coverage, which has thus far been largely centered on catering to the Japan Self-Protection Forces, or JSDF.
Prime Minister Shigeru Ishiba has additionally signaled sharper give attention to the protection sector and have become the primary sitting prime minister to attend DSEI Japan, the nation’s largest protection exhibition.
Whereas the shift in stance comes at a time when world protection spending has been on the rise, Japan’s motivations are linked extra to its safety considerations than benefiting from the surge in world arms demand, specialists informed CNBC.
The largest cause behind this shift is to deepen ties and enhance interoperability of Japanese forces with allies and companions, stated Rintaro Inoue, analysis affiliate on the Institute of Geoeconomics, a Tokyo-based assume tank.
By exporting its arms overseas, a nation is ready to enhance interoperability with the buying events by standardizing upkeep processes for {hardware} and creating joint coaching alternatives.
“This rationale has been the principle pillar after Prime Minister [Shinzo] Abe created the idea of ‘proactive contribution to peace’ in 2013 which goals to deepen cooperation with different Western international locations on this space, and particularly in safety fields,” he stated.
When the late Abe was in workplace, he led efforts to revise the interpretation of Article 9 of Japan’s structure to permit the JSDF to extra actively contribute to worldwide peacekeeping efforts and defend allies.
Japan additionally needs to develop its protection industrial base, which had been in “very poor circumstances” earlier than the nation moved to extend its protection funds in 2022, Inoue stated. Exports will permit it to realize the economies of scale wanted to make home manufacturing extra viable.
As a substitute of investing in Japan’s home protection base, the nation has largely bought weapons from the U.S., such because the F-35 fighter jets and SPY-7 radar methods.
“This created a extreme scenario among the many protection business based mostly in Japan, and several other firms have left the business, particularly within the provide chain,” Inoue stated. In 2023, greater than 100 firms have been reported to have left the protection business up to now 20 years.
Naoko Aoki, political scientist at U.S.-based coverage assume tank RAND, stated that Japanese protection corporations have historically operated with restricted home demand from the JSDF. Having the ability to export protection gadgets implies that firms would have an even bigger buyer base, serving to them develop manufacturing capacities, decrease prices and have extra flexibility.
“Even when the JSDF wanted extra of, for instance munitions, these firms wouldn’t be wanting to put money into new services to supply extra of them, in the event that they assume that may be a one-time request. If there have been extra steady demand at a better degree, nevertheless, they will justify the funding,” Aoki stated.
As of 2024, Japan’s arms exports stood at 21 million TIV — simply 0.1% of world arms exports — in keeping with the Stockholm Worldwide Peace Analysis Institute. The TIV or trend-indicator worth is a measure of the quantity of worldwide transfers of main typical weapons.
Compared, neighboring South Korea exported 936 million TIV in 2024, with 3.3% of world arms exports, whereas TIV for China, the most important Asian arms exporter from 2020-2024 stood at 1.13 billion, accounting for 3.9% of world shipments.
Protection is engaging as a progress sector, in keeping with veteran investor David Roche, strategist at Quantum Technique. “Demand will exceed provide for a decade,” he stated. So, constructing home capability is of paramount significance.
Roche stated that if nations resembling Japan keep depending on the U.S., the Trump administration’s extra transactional method will oblige them to pay for rather more of their very own protection, or protection tools equipped by the U.S.
Roche pointed to U.S. Protection Secretary Pete Hegseth’s speech through the 2025 Shangri-La Dialogue, earlier this month: “We ask — and certainly, we insist — that our allies and companions do their half on protection … NATO members are pledging to spend 5% of their GDP on protection, even Germany.”
“So it would not make sense for international locations in Europe to do this whereas key allies in Asia spend much less on protection within the face of an much more formidable menace, to not point out North Korea,” Hegseth added.
“In the event that they mistrust the U.S. to honor its treaty engagements, then particular person nations should guarantee their very own safety and spend some huge cash doing so,” Roche stated.
Easing restrictions
Japan in 1967 adopted “Three Rules on Arms Exports” that restricted arms exports, and later expanded these rules to a virtually impose an across-the-board ban on arms exports, aside from transfers of navy applied sciences to the U.S.
The nation relaxed this stance underneath Abe, with former Prime Minister Fumio Kishida easing the curbs additional in 2023.
The most up-to-date modifications permit protection tools manufactured in Japan underneath license from overseas protection corporations, together with completed merchandise, to be exported to the licensing nation and from there to 3rd international locations.
For instance, Japan agreed in late 2023 to fabricate — underneath license — and export Patriot interceptor missiles to the U.S., whose stockpiles have been depleted after supplying these missiles to Ukraine.
Neighbor South Korea has seen rising world curiosity in its arms business and is striving to grow to be a serious world arms provider. Will Japan have the ability to compete? Specialists differ.
Roche says that Japan has the information, expertise and know-how to be a serious arms provider, however IOG’s Inoue warns that Japan might face manufacturing points as a consequence of its falling inhabitants and rising proportion of seniors.
“I believe it is very tough for Japan to as soon as once more focus into manufacturing jobs,” he stated.
RAND’s Aoki pointed to still-strict laws. “Japan has the technical capability to do many issues,” however as export laws stay extreme, it can use exports primarily as a device to strengthen its protection industrial base and protection relations with like-minded international locations, notably the U.S.
