JS Ikazuchi — a Japan Maritime Self-Defense Force escort ship.
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This year is critical for updating Japan's defense policy, including revising the Three National Security Documents, removing the five-category restrictions on defense equipment exports, and formulating a new defense industrial strategy.
These measures must clearly articulate the construction of a system truly capable of protecting the nation and its people, commensurate with the intensity of the threats Japan faces.
Below is an assessment of the security environment surrounding Japan through the lenses of the United States, China, and the Indo-Pacific nations.
The United States
US foreign policy is becoming increasingly unpredictable. Relations between the United States and Europe, once characterized by strong unity, have developed significant rifts over US tariff policies and European defense spending. Including the war in Ukraine, now entering its fourth year since Russia's invasion, the United States insists that Europe itself should bear primary responsibility for European security. As a result, European nations are being compelled to move away from their long-standing dependence on the United States.
Regarding Taiwan, while the United States continues to support deterrence against Chinese military aggression, uncertainty remains over how the US military would actually respond if an invasion were to occur.
Relations with ASEAN countries other than the Philippines, as well as with India, have also shown signs of deterioration, partly due to US support for Israel in the Middle East. Nonetheless, isolated diplomatic successes in security cooperation with countries such as India and Indonesia provide at least some reassurance.
Meanwhile, the recent conflict with Iran showcased the overwhelming military capabilities of the United States and Israel, but also revealed vulnerabilities in America's ability to sustain long-term operations, as well as the effectiveness of Iranian retaliation.
The closure of the Strait of Hormuz by both the United States and Iran has already had a profound impact on the global economy, including Japan's.
China
Beijing continues to intensify military, economic, and diplomatic pressure on Japan. It no longer conceals its hegemonic ambitions. Pressure on Taiwan increases year by year, while the militarization of the South China Sea has reached an effectively irreversible stage. In addition, the wars in Ukraine and Iran have highlighted China's close military and economic coordination with Russia, North Korea, and Iran.
According to Japan's Defense White Paper, China's military budget (excluding development expenditures) has increased sevenfold over the past two decades to approximately ¥40 trillion ($276 billion)—five times Japan's defense budget.
China possesses more than 2,000 missiles capable of striking all of Japan, and its current stockpile of 600 nuclear warheads is projected to increase to 1,000 by 2030. In terms of naval vessels and aircraft, China already far exceeds the combined totals of Japan, the United States, and South Korea.
China has maintained a hardline stance in response to Prime Minister Takaichi's statement that a Taiwan contingency could threaten Japan's survival. Any blockade or conflict in the Taiwan Strait or the Bashi Channel—critical arteries of global logistics—would undoubtedly inflict economic damage on Japan and Asia far exceeding that caused by the closure of the Strait of Hormuz.
Indo-Pacific Nations
Australia strongly shares Japan's commitment to peace and stability in the Indo-Pacific. Australia possesses a deep sense of crisis rooted in concerns that if China breaks through the First Island Chain, Australia itself will be next. This shared sense of values was one of the reasons the Australian government chose to procure Mogami-class frigates from Japan.
The Philippines has purchased Japanese air-defense radar systems and Coast Guard patrol vessels, and trilateral relations among Japan, the US, and the Philippines remain solid.
Across the broader ASEAN region, however, Japan's presence significantly lags behind China's. Although defense cooperation has steadily progressed, it lacks the impact of China's investment scale and political messaging—despite ASEAN leaders long voicing their desire for "a stronger Japan."
Relations with India can be considered successful from both economic and security perspectives. The key challenge going forward will be whether the QUAD framework—consisting of Japan, the United States, Australia, and India—can evolve into a structure genuinely committed to the peace and stability of the Indo-Pacific.
Planning for the Worst
Under such circumstances, while the hope remains that the Japan-US alliance will not face a situation similar to Europe's, it is the duty of Japanese politicians to prepare for even pessimistic scenarios. If an armed conflict were to arise in the region contrary to Japan's intentions—due to actions by a third country—how effectively could the country respond under current conditions?
Japan must therefore renew its commitment to independent deterrence, collective security with allies and like-minded nations, and the resolve to become the "moral anchor" of the Indo-Pacific.
What Constitutes an Appropriate Defense Budget?
The appropriateness of defense spending is often debated in terms of its share of GDP, largely because that metric is emphasized by the United States. However, should not the true benchmark instead be the cost of building a defense posture capable of deterring threats against Japan?
First, it is necessary to carefully assess China's nuclear arsenal, missiles, aircraft, naval assets, and the operational proficiency of the People's Liberation Army. Russia's and North Korea's potential actions must also be taken into account.
On that basis, various scenarios must be considered, including situations in which the Japan-US alliance and quasi-alliances with countries such as the United Kingdom and Australia function effectively—and situations in which they do not.
Sovereign Defense Power
Even if alliances and quasi-alliances fail to function adequately, the government's responsibility to protect the nation and its people remains unchanged. Therefore, Japan must be capable of conducting necessary operations based on its own independent judgment and sustaining them over an extended period. A system in which Japan exercises sovereignty over every aspect of its defense equipment is indispensable.
This requires precise targeting capabilities, supported by intelligence for deterrence purposes; C2 (command and control) systems linking land, sea, and air forces and equipment; and effective strike capabilities that can be exercised independently when necessary. The required level of strike capability should include the ability to neutralize deeply buried underground command-and-control facilities and missile silos housing nuclear-capable missiles deep within the territory of hostile states.
For Japan to possess nuclear weapons would be extraordinarily difficult both politically and physically. On the other hand, the deterrent effect of cruise missiles such as the Tomahawk or island-defense glide missiles remains questionable.
Therefore, Japan must begin discussing strike capabilities that exceed conventional cruise missiles while remaining short of nuclear weapons, together with missiles possessing ranges exceeding 4,000 kilometers.
Evolution of Equipment and Warfare
The wars in Ukraine and Iran have demonstrated the extensive deployment of unmanned systems and electronic warfare across land, sea, and air domains. At the same time, the pace of technological advancement continues to accelerate. Warfare is increasingly taking the form of attritional mass deployment using lower-cost systems.
Within the ongoing discussions in the Liberal Democratic Party regarding revisions to the Three Security Documents, the rapid introduction of unmanned systems—alongside previously mentioned standoff weapons—is being prioritized.
The key is to assess the evolution of warfare and equipment performance accurately, and to combine combat-proven technologies (software) with Japan's manufacturing strengths to maintain deterrence at a high level. In particular, for core defense systems, Japan must build a structure that enables domestic production and export capability rather than dependence on imports.
Leveraging Japan's Strengths
The government is currently undertaking national-level initiatives in semiconductors and AI as part of efforts to create new growth industries. I firmly believe the next such strategic challenge should be the defense industry.
Particularly in a country with limited human resources like Japan, the highly skilled engineers, international business professionals, and financial experts employed by core industries such as the automobile sector are national treasures. Therefore, there should be strong expectations for shifting these human resources into the defense industry to create a new engine of growth.
A Stronger Card for Reinforcing the Japan-US Alliance
The deterrent power of the Japan-US alliance remains the cornerstone of Japan's security policy. Tokyo must ensure that this alliance functions under all circumstances.
Economically, Japan is the largest foreign investor in the United States and the country that creates the most jobs there. However, in the field of defense, as I argued in my recent book "Indo-Pacific Strategy 2.0", Japan still has room to contribute further to mutual Japan-US interests.
One avenue is to enhance America's strategic indispensability in defense by strengthening US defense supply chains, thereby building stronger partnerships.
Through DICAS (Defense Industrial Cooperation, Acquisition, and Sustainment Forum), discussions are already underway regarding joint missile production, maintenance of US naval vessels and aircraft, and supply-chain resilience. Japan should proactively propose even broader contributions.
The collapse of the Japan-US alliance would amount to permitting the collapse of the international balance of power itself.
For example, in March 2026, Japan's Ministry of Defense received its first delivery of Tomahawk cruise missiles from the United States. However, due to support for Ukraine and operations in Iran, the US had expended roughly 20% of its total Tomahawk inventory by the end of March—equivalent to a full year's production—and subsequent deliveries to Japan have already been significantly delayed.
At a time when constraints in US production capacity are casting a shadow over global security, it is critically important for Japan to invest in and support bottlenecks within the American defense industry.
Moreover, as a manufacturing powerhouse, Japan should establish domestic production and stockpiling systems for defense equipment such as missiles and drones, contributing as a supplier to the needs of the United States and like-minded nations. Doing so would further enhance Japan's strategic indispensability and represent one of the most effective policies for contributing to international peace and stability.
The 'Moral Anchor' of the Indo-Pacific
The harsh reality of the South China Sea becoming a Chinese fortress clearly demonstrates that ASEAN countries and India require stronger defense capabilities. Raising the costs of China's hegemonic ambitions in the Indo-Pacific, firmly rejecting unilateral changes to the status quo by force, and protecting freedom of navigation are the most effective means of preserving peace and stability in the region.
The recent closure of the Strait of Hormuz and the resulting disruption of oil exports inflicted severe economic damage not only on Japan but also on many other countries. Should similar disruptions occur in the Taiwan Strait, the Bashi Channel, or the Strait of Malacca, the resulting damage would far exceed that caused by disruptions in the Strait of Hormuz.
Japan must resolve to become the "moral anchor" of the Indo-Pacific. Beyond merely speaking about peace, Japan must fulfill its responsibilities by providing more tangible support for strengthening the defense capabilities of countries throughout the region.
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Author: Yoshiaki Wada
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