Market Intelligence
Aerospace and Defense Japan Transport and Logistics

Japan Defense Industry

Due to security concerns in Asia, there are market opportunities for U.S. defense manufactures interested in Japan’s already favorable market.

Major U.S. defense contractors have developed working relationships over many years with domestic manufacturers for license production of U.S. military technology and equipment in Japan. The Japanese market’s need for interoperability of military technology and equipment has historically strongly favored U.S. defense suppliers over European and other third-country suppliers. CS Japan expects this trend to continue. CS Japan encourages new-to-market U.S. suppliers of defense products that are seeking opportunities to sell to Japanese defense programs to seek local partnerships with specialized trading firms capable of representing them as registered vendors to Japan’s Ministry of Defense.

Japan’s growing national defense expenditures are mainly driven by its assessment of an increasingly challenging regional security environment, including perceived threats due to advancing North Korean missile technologies and China’s growing regional influence.

On December 24, 2021, Japan’s Cabinet approved a record 5.4 trillion yen defense budget for the Japanese Fiscal Year 2022 (April 2022-March 2023), a 1.1% increase from the previous year. Highlights from the budget include:

Naval—The Japan Maritime Self-Defense Force (JMSDF) will continue to modify its two Izumo-class helicopter carriers (JS Izumo and JS Kaga) into aircraft carriers capable of enabling Lockheed Martin F-35B fighter aircraft operations (6.1 billion yen). In addition, the JMSDF secured 20.2 billion yen to acquire SM-6 air-defense missiles for the first time to arm its two Maya-class Aegis-equipped destroyers. It also requested 5.8 billion yen to modify the Lockheed Martin AN/SPY-7 solid-state radars (SSRs) that the Government of Japan plans to fit onto two Aegis-equipped ships set to replace the cancelled ground-based Aegis Ashore ballistic missile defense systems.

Land—The Japan Ground Self-Defense Force will acquire a new 1,700-ton logistic support vessel as well as a new class of 350-ton landing craft utility vessels to enhance its transportation capabilities (10.2 billion yen).

Air—The Japan Air Self-Defense Force will procure an additional eight conventional take-off and landing F-35As (76.8 billion yen) and four short take-off and vertical landing F-35Bs during the next fiscal year (51 billion yen). Japan is in the process of acquiring 147 F-35 fighters from the United States over the coming decade. Once the acquisition is complete, Japan will be the world’s second-largest F-35 operator, after the United States.

For more information about defense market developments in Japan and related opportunities for U.S. firms, please contact the U.S. Commercial Service at