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Japan, famend for its pacifist structure, is now setting its sights on the worldwide arms exports market.
Protection Minister Gen Nakatani earlier this month instructed Nikkei that he wished to advertise Japan’s protection exports, signaling a transparent shift within the nation’s arms coverage, which has up to now been largely restricted to catering to the Japan Self-Protection Forces, or JSDF.
Prime Minister Shigeru Ishiba has additionally signaled sharper deal with 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 making the most of the surge in world arms demand, consultants instructed CNBC.
The most important purpose behind this shift is to deepen ties and improve interoperability of Japanese forces with allies and companions, mentioned Rintaro Inoue, analysis affiliate on the Institute of Geoeconomics, a Tokyo-based suppose 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 mentioned.
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 mentioned. Exports will enable it to realize the economies of scale wanted to make home manufacturing extra viable.
As an alternative 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 trade based mostly in Japan, and several other corporations have left the trade, particularly within the provide chain,” Inoue mentioned. In 2023, greater than 100 corporations had been reported to have left the protection trade previously 20 years.
Naoko Aoki, political scientist at U.S.-based coverage suppose tank RAND, mentioned that Japanese protection companies have historically operated with restricted home demand from the JSDF. With the ability to export protection gadgets signifies that corporations 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 corporations wouldn’t be wanting to spend money on new services to provide extra of them, in the event that they suppose that may be a one-time request. If there have been extra secure demand at the next stage, nonetheless, they’ll justify the funding,” Aoki mentioned.
As of 2024, Japan’s arms exports stood at 21 million TIV — simply 0.1% of world arms exports — in accordance 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 biggest Asian arms exporter from 2020-2024 stood at 1.13 billion, accounting for 3.9% of world shipments.
Protection is enticing as a development sector, in accordance with veteran investor David Roche, strategist at Quantum Technique. “Demand will exceed provide for a decade,” he mentioned. So, constructing home capability is of paramount significance.
Roche mentioned that if nations equivalent to 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 gear provided by the U.S.
Roche pointed to U.S. Protection Secretary Pete Hegseth’s speech throughout 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 try this whereas key allies in Asia spend much less on protection within the face of an much more formidable risk, 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 mentioned.
Easing restrictions
Japan in 1967 adopted “Three Rules on Arms Exports” that restricted arms exports, and later expanded these ideas to a virtually impose an across-the-board ban on arms exports, apart 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 adjustments enable protection gear manufactured in Japan underneath license from international protection companies, 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 had been depleted after supplying these missiles to Ukraine.
Neighbor South Korea has seen growing world curiosity in its arms trade and is striving to develop into a significant world arms provider. Will Japan be capable of compete? Consultants differ.
Roche says that Japan has the information, abilities and know-how to be a significant arms provider, however IOG’s Inoue warns that Japan could face manufacturing points attributable to its falling inhabitants and rising proportion of seniors.
“I believe it’s totally troublesome for Japan to as soon as once more focus into manufacturing jobs,” he mentioned.
RAND’s Aoki pointed to still-strict rules. “Japan has the technical capability to do many issues,” however as export rules stay extreme, it can use exports primarily as a software to strengthen its protection industrial base and protection relations with like-minded international locations, significantly the U.S.
