TOKYO - Japan has warned defence contractors of deep cuts to expected orders as fiscal constraints threaten to scale back a military build-up that Prime Minister Sanae Takaichi’s government says is needed to counter China, four sources said.
Finance ministry officials last week proposed spending between 50 trillion (S$402 billion) 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 could mean cuts by as much as half in planned purchases of some missiles and aircraft, including US-made F-35 stealth fighters, the sources said.
The sources asked not to be identified because they were not authorised to speak to the media. The finance and defence ministries did not immediately respond to requests for comment.
The revised spending proposal 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%…
