Japan defense spending goals hit by inflation, weak yen and political uncertainty

With the Cabinet’s approval on Friday of another record ¥8.7 trillion ($55.1 billion) for fiscal 2025 — a 9.4% year-on-year increase — Tokyo has taken another significant step to raise defense spending to 2% of gross domestic product (GDP) by fiscal 2027.

But the road ahead is looking increasingly bumpy.

Not only is there growing uncertainty about how to secure future budget hikes, Tokyo is also getting far less bang for its buck as inflation and the yen’s diminishing value erode Japan’s plans for its largest military buildup in postwar history.