Defense & Security

Japan Sets up Expert Panel on Strengthening Defense Capabilities; Financial Resource Measures, yen Issues on Agenda

Yomiuri Shimbun file photo
The main gate of the Defense Ministry in Shinjuku Ward, Tokyo

The Yomiuri Shimbun

7:00 JST, February 18, 2024

The Defense Ministry announced Friday that it has established an expert panel to discuss its plan to drastically strengthen defense capabilities.

The first meeting of the panel will be held on Monday. The panel is expected to discuss measures that will realize the strengthening of the capabilities based on the government’s three fundamental documents on defense, which include the National Security Strategy that was formulated in December 2022. The panel is also expected to discuss measures to secure financial resources as well as issues regarding the weak yen and rising prices.

The experts include Sadayuki Sakakibara, former chairman of the Japan Business Federation (Keidanren); Shinichi Kitaoka, professor emeritus at the University of Tokyo; Shinsuke Sugiyama, former ambassador to the United States; and Toshikazu Yamaguchi, president of Yomiuri Shimbun Holdings.

The agenda will also likely cover a defense policy that is strategic and flexible, including areas such as space and cyberspace. It will also discuss how to link economic growth and scientific and technological innovation through the enhancement of defense capabilities.

The government has decided to set total defense expenditures for the five years from fiscal 2023 at about ¥43 trillion. The defense budget and expenditures are planned to be gradually increased, with about ¥8.9 trillion in fiscal 2027. Slightly over ¥1 trillion of the annual defense budget will be secured by increasing income, corporate and cigarette taxes.

However, there is persistent opposition to the tax hike within the ruling Liberal Democratic Party, and the decision on the timing of the tax increase has been postponed.

When the government decided on the total amount of about ¥43 trillion, the calculation assumed an exchange rate of ¥108 to the dollar. Recently, the yen has continued to weaken, reaching around ¥150 on Friday, and there are concerns that the total expenditures could exceed the planned amount of about ¥43 trillion.