Japan's defence industry will expand rapidly

Significance Tokyo is harnessing civil-military synergies and boosting government spending to expand Japan’s defence sector. Meanwhile, it has eased rules governing firms’ profits and exports and deepened defence cooperation with the United States. Nonetheless, structural growth impediments remain. Impacts Japanese defence firms will become a key node in supply chains as crucial suppliers for Western defence companies. Cooperation with the United States and Europe in developing and manufacturing new products will gain momentum. Sectoral growth will create technological spin-offs, accelerating innovation in related industries producing dual-use and civil products. The sector’s expansion enhances Japan’s role as a partner of the United States and its allies amid rising regional and global tensions.