Japan Defense Market Size, Trends, Budget Allocation, Regulations, Acquisitions, Competitive Landscape and Forecast to 2028

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Explore the following in-depth analysis and actionable insights in the Japan Defense Market’ report:

  • Japan defense budget: Detailed analysis of the Japan FY2023 defense budget broken down into market size and market share. This is coupled with an examination of key current and future acquisitions.
  • Regulation: The procurement policy and process is explained. This is coupled with an analysis of Japan’s military doctrine and strategy to provide a comprehensive overview of the country’s military regulation.
  • Security Environment: Political alliances and perceived security threats to Japan are examined and they help to explain trends in spending and modernization.
  • Import and Export Dynamics: Analysis of prevalent trends in the country’s imports and exports over the last five years.
  • Competitive landscape and strategic insights: Analysis of the competitive landscape of the country’s defense industry.

How is the ‘Japan Defense Market’ report different from other reports in the market?

Making the right business decisions that are based on in-depth analysis and understanding of the market dynamics, to gain a competitive edge is key to every country’s defense department.  Below are the top benefits you will gain by purchasing this report:

  • Determine prospective investment areas based on a detailed trend analysis of Japan’s defense market over the next five years.
  • Gain an in-depth understanding of the underlying factors driving demand for different defense and internal security segments in the Japanese market and identify the opportunities offered.
  • Strengthen your understanding of the market in terms of demand drivers, market trends, and the latest technological developments, among others.
  • Identify the major threats that are driving Japan’s defense market providing a clear picture of future opportunities that can be tapped, resulting in revenue expansion.
  • Channel resources by focusing on the ongoing programs that are being undertaken by the Japanese government.
  • Make correct business decisions based on an in-depth analysis of the competitive landscape consisting of detailed profiles of the top defense equipment providers in the country.

We recommend this valuable source of information to anyone involved in:

  • Defense Startups, Original Equipment Manufacturers (OEMs),
  • Defense Planners and Government Bodies
  • Business Development and Market Intelligence
  • Investment Analysts and Portfolio Managers
  • Professional Services – Investment Banks, PE/VC firms
  • M&A/Investment, Management Consultants, and Consulting Firms

To Get a Snapshot of the Japan Defense Market Report

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Japan Defense Market Report Overview

The Japan defense budget is worth $50 billion in 2023, and, is anticipated to register a CAGR of more than 5% during 2024-2028. The growth in the defense budget can be attributed to the need to counter potential threats from China and North Korea.

Recently, Japan scrapped its long-standing 1% GDP ceiling for annual defense spending and has evinced an intent to increase it by 2% over the next decade. It reflects the country’s intent to bolster its own national defense capabilities.

Japan Defense Market Outlook, 2023-2028 ($Billion)

Japan Defense Market Outlook, 2023-2028 ($Billion)

To reinforce its defense posture in the Asia-Pacific region, the country has signed a deal with Lockheed Martin Corp to acquire a fleet of 105 F-35 fighters.

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The Japan defense budget market research report provides the market size forecast and the projected growth rate for the next five years. It also covers industry analysis including the key market drivers, emerging technology trends, and major challenges faced by market participants. It offers insights regarding key factors and government programs that are expected to influence the demand for military platforms over the forecast period.

Defense Budget (2023) $50 Billion
CAGR (2024-2028) >5%
Forecast Period 2024-2028
Historical Period 2019-2023
Key Sectors ·       Submarines

·       Military Fixed-Wing Aircraft

·       Naval Vessels and Surface Combatants

·       Tactical Communications Systems

·       EO/IR Systems

·       Military Radar

·       Electronic Warfare Systems

·       Underwater Warfare Systems

·       INS GNSS

Leading Companies ·       IHI Corp

·       Mitsubishi Heavy Industries Ltd

·       Lockheed Martin Corp

·       Kawasaki Heavy Industries Ltd

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Japan Defense Market Drivers

Potential threats from China and North Korea is one of the main factors driving defense budget in Japan. To counter them Japan has been investing in the development of stealth fighter jets, new long-range missile systems and new compact warships.

Japan has reinforced its alliance with the US to modernize its defense capability to better meet the security challenges of today and the future. It has been prioritizing space, cyberspace, and the electromagnetic spectrum to create a multidomain defense force.

Japan Military Doctrines and Defense Strategies

In line with the prospective of Proactive Contribution to Peace as well as the overall National Security Strategy, Japan has improved its overall defense capability and diplomatic posture. It has worked assiduously to deepen and further expand cooperative relationships with other countries, of which the Japanese-US alliance is of exceptional importance. As such Japan as per its constitution has observed the core principle of maintaining a defense-oriented policy and has explicitly avoided transforming into a belligerent military power that poses a grave threat to other countries. The country has also ensured absolute civilian control of its military and has strictly abided by the three non-nuclear principles.

The core idea of the National Defense Policy is that Japan will defend to the end in order to ensure its security and deter threats offshore. Achieving these objectives requires the strengthening of military defense capabilities and remaining at the forefront of new developments in defense, such as the classification of space and cyberspace domains as new domains of warfare with US cooperation.

Japan Defense Market Segmentation by Sectors

Japan intends to unveil a domestically developed missile with the capability to intercept ballistic missiles and hypersonic glide weapons by fiscal 2027.

The key sectors in the Japan defense market are submarines, military fixed-wing aircraft, naval vessels and surface combatants, tactical communications systems, EO/IR Systems, military radar, electronic warfare systems, underwater warfare systems, and INS GNSS among others. Military fixed-wing aircraft is the largest sector within the Japan defense market in 2023.

The country has traditionally favored investments in developing a highly competent air-combat wing and has typically preferred single-engine multi-role fighter aircraft. The market for Military Fixed-Wing aircraft is mainly supported by multirole aircraft sub-sector. The growth in the market will be further fueled by maritime patrol aircraft sub-sector, which as the second largest sub-sector is anticipated to register significant growth during 2023–2028.

Japan Defense Market Analysis by Sectors, 2023 (%)

Japan Defense Market Analysis by Sectors, 2023 (%)

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Japan Defense Market - Competitive Landscape

The United Kingdom’s and Italy’s motivation to partner with Japan in the GCAP is to fill gaps in development funding. IHI Corp is the supplier of GCAP.

Some of the leading defense companies operating in Japan are IHI Corp, Mitsubishi Heavy Industries Ltd, Lockheed Martin Corp, and Kawasaki Heavy Industries Ltd among others.

Japan Defense Market Analysis by Players, 2023 (%)

Japan Defense Market Analysis by Players, 2023 (%)

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Segments Covered in the Report

Japan Defense Sectors Outlook (Value, $ Billion, 2019-2028)

  • Submarines
  • Military Fixed-Wing Aircraft
  • Naval Vessels and Surface Combatants
  • Tactical Communications Systems
  • EO/IR Systems
  • Military Radar
  • Electronic Warfare Systems
  • Underwater Warfare Systems

Key Highlights

  • Japan’s defense expenditure recorded a CAGR of 2.1% between 2019 and 2023 and amounted to $50 billion in 2023. Over the forecast period, Japan’s expenditure is expected to reach $85.9 billion in 2028, growing at a CAGR of 5.1%. Despite the contracting economy, Japan’s military modernization programs are not affected. It is expected to continue to invest in defense modernization and procurement plans. The acquisition budget is expected to grow from $42.8 billion in 2024 to $53.8 billion in 2028.
  • Japan’s acquisition budget in 2023 is valued at $33.4 billion, which is significant owing to the need to finance its ongoing procurement programs. The government has removed the 1% GDP cap over its defense spending and invested in the sector to meet the dynamic security challenges posed by China and North Korea. This would mean that the country would not be restricted to expand and grow militarily powerful.
  • The country has traditionally favored investments in developing a highly competent air-combat wing and has typically preferred single-engine multi-role fighter aircraft. Military fixed wing is the largest sector in the Japanese defense market followed by naval vessels and surface combatants and military rotorcraft.

Table of Contents

  • 1. Executive Summary
  • 2. Defense Budget Assessment

    • 2.1. Budgeting Process
    • 2.2. Defense Market Size Historical And Forecast
    • 2.3. Drivers Of Defense Expenditure
    • 2.4. Analysis of Defense Expenditure Allocation
    • 2.5. Analysis Of Defense Budget Allocation

  • 3. Military Doctrine And Security Environment

    • 3.1. Military Doctrine And Strategy
    • 3.2. Strategic Alliances and Geopolitics
    • 3.3. Political, Social, and Economic Scenario

  • 4. Market Entry Strategy And Regulations

    • 4.1. Defense Procurement Bodies
    • 4.2. Trade Associations and clusters
    • 4.3. Funding Opportunities
    • 4.4. Market Regulations and Market Entry Routes
    • 4.5. Key Challenges
    • 4.6. Major Deals and M&A

  • 5. Market Attractiveness And Emerging Opportunities

    • 5.1. Market Attractiveness, 2023–28
    • 5.2. Top Defense Segments By Value

  • 6. Defense Platform Acquisitions

    • 6.1. Defense Platform Acquisitions By Value
    • 6.2. Global Combat Air Programme
    • 6.3. F-35B
    • 6.4. Aegis-class Destroyers
    • 6.5. Mogami-class
    • 6.6. F-35A
    • 6.7. P-1
    • 6.8. SH-60L
    • 6.9. Taigei-class

  • 7. Fleet Size
  • 8. Competitive Landscape

    • 8.1. Defense Companies Operating In Japan
    • 8.2. Main Defense Companies

  • 9. Appendix

    • 9.1. About This Report
    • 9.2. About Us
    • 9.3. Contact Us

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