Japan to hike annual defence budget by a quarter to buy Tomahawks and other weapons

TOKYO, Dec 23 (Reuters) – Japan on Friday said it will hike defence spending by more than a quarter next year including $1.6 billion to buy U.S.-made Tomahawk cruise missiles that will be part of its biggest military build-up since World War Two.

The 26.3% increase to a record 6.82 trillion yen ($51.7 billion) for the year starting April 1 will allow Japan to more than triple spending on munitions it wants to deter regional rivals China and North Korea as Russia’s attack on Ukraine spurs regional tensions.

The budget, which lawmakers will approve before April, allocates 897 billion yen for weapons development, more than in the previous four years combined. Japan will use almost half of that to develop new longer-range missiles that along with Raytheon Technologies’ (RTX.N), Tomahawks will give it the ability to strike targets more than 1,000 kilometres away, including in China.

Tokyo plans to begin deploying those new weapons in around three years, a Ministry of Defence official said at a briefing.

Japan, which relinquished its right to wage war after its defeat in World War Two, plans to double defence outlays to 2% of gross domestic product within five years. That will make it the world’s third-biggest military spender after the United States and China, based on current levels.

That unprecedented spending reflects Japan’s concern that China could attack neighbouring Taiwan, and in doing so threaten Japanese islands and put a potential stranglehold on sea lanes that supply Middle East oil.

To help it sustain any prolonged conflict Japan said it will double outlays on maintenance and spare parts next year. It will also increase spending on drones, cyber warfare capabilities, ballistic missile defences, reconnaissance and communications satellites, warships, and transport aircraft.

To reinforce its air fighting capability, it also plans to buy 16 Lockheed Martin Corp (LMT.N) F-35 stealth fighters for 250 billion yen. Half of them will be Vertical Take Off and Landing (VTOL) B variants that it will deploy on two converted aircraft carriers.

Japan has also earmarked 102 billion yen next year for a joint jet fighter development project with Britain and Italy announced this month, that aims to put an advanced aircraft into operation by 2035.

Prime Minister Fumio Kishida has said he plans to raise taxes to pay for his military spending surge but has yet to provide a detailed plan of how Japan will fund the build-up.

($1 = 132.2400 yen)

Reporting by Tim Kelly; Editing by Tomasz Janowski

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