Japan Weighs Cuts to F-35 and Missile Orders as Defense Budget Plans Collide With Fiscal Limits

A bigger budget could still buy fewer weapons

Japan is considering a defense spending plan of 50 trillion to 60 trillion yen for the five years beginning in April 2027, while warning arms suppliers that some expected aircraft and missile orders could be cut by as much as half. The proposed limits would affect a military buildup that Prime Minister Sanae Takaichi says is needed to counter China's growing military power.

Four people familiar with the discussions described the Finance Ministry proposal, equivalent to about $313 billion to $376 billion. It exceeds the current plan's 43 trillion yen but falls short of the roughly 80 trillion yen sought by some defense officials and lawmakers in the ruling Liberal Democratic Party.

Government officials described negotiations on November 13, 2026, as moving toward approximately 60 trillion yen, with the Defense Ministry seeking a figure in the upper 70 trillion yen range and the Finance Ministry arguing for spending in the 50 trillion yen range.

The apparent contradiction is central to the dispute: Japan could spend substantially more money while ordering fewer weapons than military planners expected. Higher aircraft prices, a weak yen, delayed American deliveries and shortages of domestic spare parts are reducing what each yen can buy.

Finance Minister Satsuki Katayama declined to discuss the proposed figures in detail when questioned by reporters, saying the government's security and defense advisory panel had not reached that stage:

The advisory panel on security and defence has not yet discussed matters at that level of detail either, so I don't think we are at a stage where I should comment,

A Defense Ministry spokesperson said the next plan's size had not been decided and that Japan would determine its defense needs before setting the budget.

What the existing plan actually promises

Japan's current Defense Buildup Program sets approximately 43 trillion yen as the spending level needed to carry out its program for fiscal 2023 through fiscal 2027. The Ministry of Defense document also sets out separate figures for annual budgets and equipment contracts.

Planned defense expenses through annual budgets total approximately 40.5 trillion yen, including around 8.9 trillion yen for fiscal 2027, subject to additional measures. New equipment and related contracts are estimated at approximately 43.5 trillion yen, excluding specified payments falling outside the plan period.

Annual spending covers money paid during a particular year. A contract can commit Japan to payments stretching across several years. Those different measures matter when comparing a proposed spending ceiling with orders that manufacturers expect to receive.

A 50 trillion yen replacement plan would be about 16% larger than the current 43 trillion yen framework; 60 trillion yen would be about 40% larger. Against the 80 trillion yen advocated by supporters of a faster buildup, however, the proposed range is 25% to 37.5% smaller.

The existing program already permits revisions based on a project's progress, effectiveness and feasibility. It also calls for reviewing projects with poor value for money, stopping the operation of equipment whose importance has declined and controlling costs.

F-35 purchases sit inside the budget dispute

Japan plans to acquire 147 F-35 fighters: 105 F-35As, which use conventional runways, and 42 F-35Bs, which can take off over short distances and land vertically. The current program includes purchases of 40 F-35As and 25 F-35Bs. Japan's first F-35Bs arrived at Nyutabaru Air Base in August 2025.

The ministry's fiscal 2027 budget request leaves both F-35A and F-35B acquisitions as items to be considered during budget preparation, rather than assigning them settled funding amounts. It does the same for other projects dependent on the revision of Japan's security documents.

The request provides approximately 9 trillion yen on a spending basis and approximately 8 trillion yen on a contract basis for projects under the existing program. Its treatment of fighter purchases leaves important procurement decisions inside the current negotiations.

The number of fighters that might be affected and any revised delivery schedule have not been disclosed. Japan has not announced a reduction in its total planned fleet of 147 aircraft.

Food tax relief competes for the same money

Takaichi's commitments to economic investment and a cut in the consumption tax on food are constraining the defense negotiations. Finance Ministry officials argue that a sharper military spending increase would be difficult to fund alongside those priorities, according to three people familiar with the discussions.

The proposed food tax reduction would remove approximately 4.3 trillion yen in annual revenue. If that annual loss continued for five years, it would total 21.5 trillion yen, more than the 17 trillion yen increase between the current defense program and a replacement worth 60 trillion yen.

That comparison shows the scale of the competing commitments. The government would need replacement funding for the tax cut, with foreign exchange reserves among the possibilities discussed. The existing defense plan calls for spending reforms, budget surpluses, a fund using revenue other than taxes, and tax measures.

Japan was already confronting a broader budget and borrowing squeeze in October, when the government sought to hold new annual bond issuance near 40 trillion yen while funding tax relief, strategic industries and defense. A weaker yen also makes weapons priced in dollars more expensive in Japanese currency.

Supporters of a larger buildup inside the LDP argue that regional security demands faster action. Their dispute with the Finance Ministry concerns how much military capacity Japan needs and how quickly taxpayers and the wider budget can support it.

Higher prices and missing parts reduce usable capacity

Kawasaki's P-1 maritime patrol aircraft illustrates how rising spending can produce disappointing results. Its unit price rose 50% between fiscal 2023 and fiscal 2026, reaching 46 billion yen, according to figures attributed to Japanese defense disclosures and audit findings.

At those prices, a fixed sum that previously bought three aircraft would buy only two. Inflation, currency movements and production bottlenecks therefore affect the size of the force Japan can assemble, even before officials reduce planned orders.

The P-1 fleet also faces an operational problem. Its mission capable rate, the share ready to carry out assigned duties, is reported to be roughly 30%, with salt corrosion and shortages of spare parts forcing the Maritime Self-Defense Force to take components from some aircraft to keep others flying.

A readiness rate near 30% means approximately three aircraft in ten are available for missions at a given time. Maintenance funding, spare components and repair capacity consequently matter alongside purchases of new aircraft.

American delivery delays complicate missile plans

Japan also faces long waits for equipment purchased through the United States' Foreign Military Sales system, under which the American government arranges approved weapons sales to foreign partners. A total of 118 contracts worth 1.14 trillion yen are reported to remain undelivered after at least five years.

Deliveries of up to 400 Tomahawk cruise missiles face delays of approximately two years amid pressure on American inventories and production following operations against Iran. Japan is acquiring the missiles as part of its counterstrike capability, the ability to attack an adversary's military targets in response to an attack.

A November 2026 assessment estimated that American Patriot interceptor stocks would recover only in late 2029 and Tomahawk stocks in early 2031. Both dates fall within the proposed Japanese spending period beginning in April 2027.

Manufacturers plan substantial production increases, but factories need time to expand and must serve several customers. Japan's challenge therefore extends beyond securing an appropriation: orders also need available production slots, components and delivery schedules that match military requirements.

F-35 production faces its own cost pressures. The Pentagon's April 2026 acquisition assessment put average aircraft procurement costs at $96.099 million in constant 2012 dollars, a measure that removes inflation, and $144.700 million in dollars reflecting spending in the relevant years. It identified risks involving Block 4 upgrades, computing equipment, engines and thermal management systems.

China's naval activity raises the cost of delay

Japan's Defense Ministry tracked annual Chinese naval transits through surrounding straits at between 13 and 22 in fiscal 2011 through fiscal 2014, rising to between 42 and 52 in fiscal 2022 through fiscal 2025, according to a September 2026 ministry assessment.

Even the lower end of the more recent range, 42, is almost twice the earlier upper figure of 22. The increase adds to the surveillance work facing Japanese ships and patrol aircraft.

The assessment describes growing activity by Chinese aircraft carriers Liaoning and Shandong, other warships, and aircraft passing through the Miyako Strait into the Pacific. It also records Chinese activity around the Senkaku Islands, which Japan administers and China claims.

Reduced availability of P-1 patrol aircraft has a concrete consequence in that setting: fewer aircraft are ready to help monitor a busier maritime environment. The spending debate therefore concerns the daily ability to observe nearby military movements as well as preparations for a possible conflict.

Relations are also strained by the dispute over Taiwan remarks made by Takaichi, who linked a possible conflict involving Taiwan to circumstances that could threaten Japan's survival. Beijing has sought a response from the prime minister herself.

Factories need predictable orders as well as funding

Mitsubishi Heavy Industries, Mitsubishi Electric and Kawasaki Heavy Industries are among the major manufacturers affected by Japan's procurement decisions. For companies considering more workers, machinery and production space, the difference between an expected order and a funded contract is substantial.

Matthew Finkel, writing about Japan's defense industry in May 2026, identified shortages of engineering talent, limited production capacity, cybersecurity weaknesses and dependence on components linked to China. He also described businesses shaped by decades of reliance on the Self-Defense Forces as their principal customer.

Many defense operations sit inside larger industrial groups with extensive commercial interests. Expanding weapons production requires investment in facilities and staff while those groups balance other business demands.

The fiscal 2027 request proposes bulk purchases, longer contracts, more common components and greater use of commercial products to lower costs. It also proposes wider use of maintenance contracts that tie payments to results, giving suppliers a financial reason to keep equipment available.

Drone purchases could receive more protection than some conventional aircraft and missile orders, according to one person familiar with the talks. The Ground Self-Defense Force has been evaluating systems including Helsing's HX-2 strike drone, with Rakuten having scheduled field trials through September 2026.

The decisions due before the next spending period

Takaichi's government aims to revise the National Security Strategy, National Defense Strategy and Defense Buildup Program by the end of 2026, bringing the update forward from 2027. Those decisions will shape both the next spending framework and unresolved items in the fiscal 2027 budget.

The sequence places several important procurement decisions close together:

• December 16, 2022: Japan adopted the current program covering fiscal 2023 through fiscal 2027.
• August 2025: The first Japanese F-35Bs arrived at Nyutabaru Air Base.
• August 31, 2026: The Defense Ministry submitted its fiscal 2027 budget request, leaving some purchases for later consideration.
• November 13, 2026: Government officials described negotiations around a new program worth approximately 60 trillion yen.
• By the end of 2026: The government aims to complete revisions to its three security documents.
• April 2027: The proposed new spending period begins, overlapping the final fiscal year of the existing program.

Washington is pressing for more spending. The 2026 US National Defense Strategy calls for allies to devote 3.5% of gross domestic product to their armed forces and another 1.5% to broader security needs. GDP measures the value of goods and services an economy produces.

Japan faces difficulty reaching the 3.5% level by fiscal 2031. Its accounting also lacks a clear division between core military spending and broader security expenses, while officials consider categories including artificial intelligence, economic security and energy.

The immediate decision is more practical than a percentage target: how much Japan will commit, which orders it will fund and how it will keep existing equipment ready while waiting for new deliveries.

Key Points

• Finance Ministry officials proposed 50 trillion to 60 trillion yen for five years beginning in April 2027, against the current 43 trillion yen program.
• Some expected aircraft and missile orders, including F-35 purchases, could be cut by as much as half.
• Japan has not announced a reduction in its planned total fleet of 147 F-35s.
• A food tax cut would remove approximately 4.3 trillion yen in annual revenue, competing with defense and growth spending.
• Higher equipment prices, maintenance shortages and delayed American deliveries are limiting military capacity.
• The government aims to complete revisions to its three main security documents by the end of 2026.