TOKYO — On Friday, the Japanese Cabinet sanctioned a historic defense budget of 8.7 trillion yen (approximately $55 billion) for the year 2025. This move reflects Japan’s accelerated initiative to enhance its strike capabilities, which now incorporates long-range cruise missiles and the deployment of Tomahawk missiles to counter the increasing threats posed by China, North Korea, and Russia.

This approved draft of the defense budget is part of Japan’s extensive military expansion strategy initiated in 2022, marking its third consecutive year under a five-year plan. The defense allocations are included in a broader national budget bill exceeding 115 trillion yen ($730 billion), which is also a record amount and awaits parliamentary endorsement by March for enactment.

Japan is preparing to introduce U.S.-manufactured Tomahawk missiles toward the end of the fiscal year 2025, reflecting its commitment to establishing a robust strike-back capability facilitated by long-range missiles targeting remote sites. The budget has earmarked 940 billion yen ($6 billion) for a comprehensive “standoff” defense initiative that incorporates not only long-range missiles but also the development of satellite systems and other military assets.

Included in these expenditures is an allocation of 1.8 billion yen ($11.4 million) intended for acquiring the necessary equipment to launch Tomahawk missiles from Aegis-class destroyers. To enhance its missile defense strategy, Japan is also setting aside an additional 533 billion yen ($3.37 billion) for acquiring interceptors and mobile reconnaissance radars, which will be stationed in Okinawa—home to more than half of the approximately 50,000 American military personnel in the country.

Under its defense guideline, Japan aspires to eventually increase its annual military expenditures to about 10 trillion yen ($63 billion), securing its position as the third-largest military spender globally, following the United States and China.

As part of its military investments, Japan is focusing on bolstering its domestic defense sector through collaborative development while promoting international sales. For the fiscal year 2025, plans include allocating 314.8 billion yen ($2 billion) for constructing three new, compact multi-purpose destroyers (FFM), each weighing 4,800 tons and designed for a crew of just 90, thanks to advanced automation technologies—substantially reducing the personnel required compared to current models. These destroyers, an upgraded version of the Mogami-class, will feature long-range missile systems, enhanced anti-submarine warfare capabilities, and high stealth functionality, thereby making them appealing for Australia in their forthcoming frigate selections.

Manufactured by Mitsubishi Heavy Industries, this class of destroyer is one of the two shortlisted options in Australia’s Sea 3000 frigate initiative, competing against Germany’s MEKO A-200 model provided by Thyssenkrupp Marine Systems. If selected, Japan will engage in joint development and production of the frigates for the Australian Navy.

This partnership aims to strengthen ties between Japan and Australia, with implications for augmenting Japan’s naval strengths, stated Defense Minister Gen Nakatani last month. As Japan’s sole treaty ally is the United States, strengthening relationships with Australia has become increasingly vital in the face of rising Chinese assertiveness in the region.

Japan is eager to secure this agreement, especially after losing out to France on a submarine contract with Australia in 2016. The Cabinet under Prime Minister Shigeru Ishiba has pre-approved the foreign sales of Mogami-class FFMs to Australia, aiming for selection, and has established a collaborative task force of government and industry representatives to advance its initiatives in Canberra.

Moreover, Japan is also collaborating on the development of a next-generation fighter jet with Britain and Italy, targeted for deployment by 2035, with 108.7 billion yen ($690 million) allocated for this venture. With a dwindling population, Japan is concentrating on integrating unmanned systems and artificial intelligence to mitigate the expected decline in personnel numbers, allocating 111 billion yen ($703 million) for this purpose. Additionally, the government has announced a strategy to improve salaries, work conditions, and career development opportunities for the Self Defense Forces to attract more recruits.