Japan warns arms suppliers of deep cuts to expected orders due to budget squeeze

Japan has warned defence contractors of deep cuts to expected orders as fiscal constraints threaten to scale back a military buildup that Prime Minister Sanae Takaichi’s government says is needed to counter China, four people familiar with the matter said.
Finance ministry officials last week proposed spending between 50 trillion and 60 trillion yen on defence over the five years starting in April 2027, the people familiar with the proposal told Reuters.
That would exceed the current 43 trillion yen five-year plan but fall well short of the 80 trillion yen advocated by some defence officials and ruling Liberal Democratic Party lawmakers.
The gap would leave Japan short of its target of raising defence outlays to 2% of gross domestic product, according to Reuters calculations, as US President Donald Trump presses Washington’s allies to spend more on their militaries.
The 2026 US National Defense Strategy calls for allies worldwide to spend 3.5% of GDP on their armed forces and a further 1.5% on broader security needs.