Japan eyes global arms market in strategic shift from pacifist roots

Japan, long recognised for its pacifist constitution and decades of minimal engagement in global arms trade, is signalling a historic shift in defence policy. With rising geopolitical tensions and the strategic need to bolster its defence industry, the country is now laying the groundwork to become a competitive player in the global arms export market.

Defense Minister Gen Nakatani recently told Nikkei Asia that he wants the cabinet to actively promote Japan’s defence exports, in what marks a sharp departure from the country’s traditionally insular military posture.

Prime Minister Shigeru Ishiba has also signalled support for the change, becoming the first sitting Japanese premier to attend DSEI Japan, the country’s largest defence industry trade show.

Deepening strategic ties

Experts say the policy pivot is motivated less by economic incentives and more by security concerns and the desire for greater interoperability with allies, especially the United States.

By exporting arms to friendly nations, Japan aims to standardise military hardware, streamline maintenance, and conduct joint training more effectively.

The move also comes as international defence spending continues to rise. At the recent 2025 Shangri-La Dialogue, US Defense Secretary Pete Hegseth emphasised that American allies must shoulder more of their own security burden, citing NATO’s pledge to spend 5 per cent of GDP on defence.

Analysts suggest that Japan’s increased focus on defence exports also reflects growing concern over regional threats, particularly from North Korea and China.

Rebuilding a struggling industry

Japan’s defence industrial base has long relied on limited domestic demand from the Japan Self-Defense Forces (JSDF). Unlike countries such as South Korea or China, Japan has historically placed strict restrictions on arms exports.

A 1967 policy known as the “Three Principles on Arms Exports” nearly eliminated overseas sales. While former Prime Minister Abe began easing those rules, further reforms under Fumio Kishida in 2023 have allowed Japan to manufacture and export weapons systems, including licensed products like Patriot missiles, which are now being sent to the US.

Yet, the domestic defence industry is still catching up. Over 100 companies have exited the defence sector in the last two decades due to low demand and high dependency on US imports such as F-35 fighters and SPY-7 radar systems.

Global ambitions and domestic challenges

As of 2024, Japan’s arms exports remain modest—just 21 million TIV (trend indicator values), or 0.1 per cent of global arms exports, according to the Stockholm International Peace Research Institute (SIPRI). By contrast, South Korea exported 936 million TIV, while China shipped 1.13 billion TIV worth of weapons.

CNBC reported that investor David Roche, of Quantum Strategy, believes Japan has the potential to become a key player. “Demand will exceed supply for a decade,” he said, noting that continued dependence on US arms could prove costly if American foreign policy becomes more transactional.

Japan also faces demographic headwinds that could hinder its ability to scale manufacturing, and export regulations remain relatively strict.

Japan has recently promoted homegrown assets like fighter jets and frigates in international forums and is working to upgrade defence cooperation with the EU, according to Nikkei Asia.

While still early days, the country’s evolving stance signals a strategic reorientation, one that may redefine Japan’s role in regional and global security for decades to come.