Market Intelligence
Aerospace and Defense Japan Trade Development

Japan Drone Market

The Japanese defense market is undergoing a significant transformation, creating new opportunities for U.S. military drone suppliers and service providers. Japan’s Defense Build-Up Program (DBP), which aims to strengthen its military capabilities by 2027, reflects a substantial increase in defense spending, with acquisition budgets rising from 15.8 percent to 25.8 percent between 2022 and 2024. Within this framework, uncrewed aircraft systems (UAS) have been identified as a priority area, with the Ministry of Defense signaling demand for:

  • Long-endurance uncrewed aerial vehicles (UAVs)
  • Ship-based small UAVs
  • Mid-range upgraded UAVs
  • Close-range UAVs
  • Mini attack UAVs designed for air patrol 

In 2022, U.S. UAS exports to Japan totaled $10 million, though the market has shown a modest decline in 2023 and 2024. This trend underscores both the growing demand for advanced unmanned systems and the importance of renewed U.S. supplier engagement to capture emerging opportunities.

Policy Shifts & Market Dynamics

Japan’s evolving defense policies further highlight the potential for U.S. drone manufacturers to expand their presence. The policy reforms of December 2023, which allow Japanese companies to export lethal military equipment to the United States, mark a shift toward deeper bilateral defense collaboration. At the same time, Japan’s domestic defense industry remains limited in scale. Even leading firms such as Mitsubishi Heavy Industries and Kawasaki Heavy Industries derive only a small share of revenues from defense contracts. This structural gap presents opportunities for U.S. drone suppliers to meet Japan’s rising demand for advanced unmanned systems, particularly in areas such as cross-domain operations, integrated air and missile defense, and sustainability-focused solutions including UAV maintenance, upgrades, and lifecycle support.

To capitalize on these opportunities, U.S. drone suppliers should consider Japan a prime market for international expansion. By forging strategic partnerships with local firms, U.S. companies can establish a stronger foothold and, through proactive engagement, position themselves as critical partners in Japan’s efforts to enhance defense capabilities while securing a share of the expanding UAS market.

For more information, please contact the U.S. Commercial Service in Japan at Office.Tokyo@trade.gov.