Japan’s decision to lift restrictions on the export of lethal arms has many hoping the country could be the defense supplier to the world. Ending this decades-old taboo would have been politically unthinkable just a decade ago. Nonetheless, this is the easy part.
The real task would be growing the defense industry quickly enough to be competitive and relevant amid a surge in global demand. Given the sector has seen decades of underinvestment and Japan’s urgent need to boost military spending, Tokyo must work fast to meet its own requirements, much less anyone else’s.
The significance of this week’s step should not be understated. The self-imposed limitations on selling military equipment abroad, first adopted in 1967 and expanded into a near-total ban in 1976, were a reflection of the country’s strict pacifist stance post-World War II. They were completely voluntary — nothing in the Japanese constitution explicitly prevents such exports — and increasingly anachronistic. However, making changes to this posture is politically risky: A Jiji poll last month showed just 27 percent support lifting the ban, with nearly a majority opposed. Had this happened a decade ago, there might have been tens of thousands on the streets protesting — credit to Japanese Prime Minister Sanae Takaichi for getting it through.
It might be tempting to look from the outside and assume this is a response to the administration of US President Donald Trump and its damage to long-standing alliances, but this has been an enduring goal of hawks within the ruling Liberal Democratic Party, such as Takaichi. Former Japanese prime minister Shinzo Abe first began to loosen the restrictions in 2014. It is all part of a normalization of Japan’s stance that has accelerated at record pace since Russia’s invasion of Ukraine. It is little exaggeration to say there have been more changes in the past five years than in the previous five decades.
They are everywhere to be seen, from deployment of the first homegrown counterstrike missiles in Kumamoto, to the Japanese Self-Defense Forces taking part in combat drills with the US and the Philippines for the first time. As concern grows about China’s aggression and the US’ increasing reluctance to be the backstop of regional peace, more and more Asian nations are looking to Tokyo, politically and logistically, to fill the void.
It is also an opportunity for Japan itself. Much like Germany, it could move excess capacity from industries such as the auto sector into defense manufacturing. A key adviser to Takaichi said the economy has suffered from the lack of government-led military investment. In 2024, Japan set up a dual-use research institute modeled on the US’ Defense Advanced Research Projects Agency, but the scale is still minuscule in comparison. The government needs to be at the forefront if it is to be the new weapons factory of the free world.
There is a lot of work to do first. Like many areas of the economy, the industry has suffered from chronic underinvestment. For years, the only customer was the government, which until recently capped spending on defense at 1 percent of GDP. Even after that changed, the bulk of investment went to US technology. With onerous supply chain demands, security was seen as high-cost and low-profit; government contracts capped profit margins, and environmental, social and governance funds shied away from investing in firms that built arms. All that led multiple players, who for decades were unable to access the market in the rest of the world, to drop out of the industry.
Things are changing.
“The international situation is now favoring Japan to go abroad,” former Japanese Ministry of Defense official and Institute of Geoeconomics senior research fellow Hirohito Ogi said, adding that he sees the industry re-evaluating its assumptions about demand.
“If multiple international customers approach Japanese firms, they will revise their conventional view about the need for their products,” he said.
There is a global boom in demand for arms as democracies feel increasingly under threat, while capacity at existing manufacturers is constrained by the need to replace stockpiles depleted by the wars in Iran and Ukraine. A new supplier — from a state increasingly viewed as the defender of Asia’s rules-based order, and a leading figure in heavy engineering and precision technology — is exactly what much of the world wants to see.
Japanese Minister of Defense Shinjiro Koizumi said several countries had already approached Tokyo with expressions of interest.
Australia’s multi-billion dollar deal to buy Mitsubishi Heavy Industries Ltd-built Mogami warships seems like the perfect advertising for the sector. Countries from New Zealand to Indonesia are interested in buying the ships themselves; reports in Taiwan even suggested that Tokyo might have eased restrictions on sharing warship blueprints with Taipei.
US defense technology company Anduril Industries Inc founder Palmer Luckey last year in Tokyo showed off an advanced drone his company created using all-Japanese parts — something he said many thought was impossible without relying on the Chinese supply chain.
“Japan is one of the only countries in the world that can do it all on their own,” he said. “If they want to.”
Luckey’s last comment is key. No one doubts the nation has the skill. What it needs now is the will.
The Japanese government must take the lead: copromoting sales abroad, changing how it configures procurement contracts to encourage investment, loosening restrictions on research and development in advanced sectors such as drones, and convincing firms to utilize their excess production capacity. The free world is waiting.
Gearoid Reidy is a Bloomberg Opinion columnist covering Japan and the Koreas. He previously led the breaking news team in North Asia and was the Tokyo deputy bureau chief. This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
In late January, Taiwan’s first indigenous submarine, the Hai Kun (海鯤, or Narwhal), completed its first submerged dive, reaching a depth of roughly 50m during trials in the waters off Kaohsiung. By March, it had managed a fifth dive, still well short of the deep-water and endurance tests required before the navy could accept the vessel. The original delivery deadline of November last year passed months ago. CSBC Corp, Taiwan, the lead contractor, now targets June and the Ministry of National Defense is levying daily penalties for every day the submarine remains unfinished. The Hai Kun was supposed to be
Most schoolchildren learn that the circumference of the Earth is about 40,000km. They do not learn that the global economy depends on just 160 of those kilometers. Blocking two narrow waterways — the Strait of Hormuz and the Taiwan Strait — could send the economy back in time, if not to the Stone Age that US President Donald Trump has been threatening to bomb Iran back to, then at least to the mid-20th century, before the Rolling Stones first hit the airwaves. Over the past month and a half, Iran has turned the Strait of Hormuz, which is about 39km wide at
The ongoing Middle East crisis has reinforced an uncomfortable truth for Taiwan: In an increasingly interconnected and volatile world, distant wars rarely remain distant. What began as a regional confrontation between the US, Israel and Iran has evolved into a strategic shock wave reverberating far beyond the Persian Gulf. For Taiwan, the consequences are immediate, material and deeply unsettling. From Taipei’s perspective, the conflict has exposed two vulnerabilities — Taiwan’s dependence on imported energy and the risks created when Washington’s military attention is diverted. Together, they offer a preview of the pressures Taiwan might increasingly face in an era of overlapping geopolitical
There is a peculiar kind of political theater unfolding in East Asia — one that would be laughable if its consequences were not so dangerous. Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) on April 12 returned from Beijing, where she met Chinese President Xi Jinping (習近平) and spoke earnestly about preserving “peace” and maintaining the “status quo.” It is a position that sounds responsible, even prudent. It is also a fiction. Taiwan is, by any honest definition, an independent country. It governs itself, defends itself, elects its leaders, and functions as a free and sovereign democracy. Independence is not a
RSS