Japan’s Cabinet on Friday (December 26) approved a record draft defense budget of 9.04 trillion yen ($58 billion) for fiscal 2026, marking the country’s largest-ever military expenditure amid growing regional tensions with China, according to AA news citing local media.

The draft budget for fiscal 2026, beginning in April, includes costs related to hosting US military bases and surpasses the previous record of 8.7 trillion yen ($55.7 billion) allocated for the current fiscal year, Kyodo News reported.

Fiscal 2026 represents the fourth year of Japan’s five-year, 43-trillion-yen ($275 billion) defense buildup plan. Under the plan, 100.1 billion yen ($641 million) has been earmarked for developing the “Shield” layered coastal defense system, integrating aerial, surface, and underwater vehicles.

Japan is also investing in drone technology, including 1.1 billion yen ($7 million) to assess long-endurance drones for countering airspace violations. To strengthen space defense, Tokyo plans to rename the Air Self-Defense Force as the Air and Space Self-Defense Force, allocating an additional 1.1 billion yen to monitor satellite interference.

The budget further includes 30.1 billion yen ($193 million) for procuring hypersonic guided missiles as a counterattack capability.

China criticized Japan’s defense increase, calling it “a move to remilitarize and resurrect militarism.” Chinese Foreign Ministry spokesperson Lin Jian said Japan’s actions reveal the motives of “right-wing forces” within the country.

Prime Minister Sanae Takaichi’s Cabinet also approved a record 122.3 trillion-yen ($783 billion) draft state budget for the fiscal year starting in April, the largest in Japan’s history.

The defense expansion follows rising tensions after Takaichi stated on November 7 that a Chinese attack on Taiwan could constitute a “survival-threatening situation,” allowing Japan to exercise collective self-defense a remark that provoked strong backlash from Beijing.

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