The defense industrial base of the Western world is faltering under tremendous strain. But thanks to Japanese Prime Minister Sanae Takaichi, it’s about to get a desperately needed injection of reinforcements.
With her historic mandate, Japan’s “Iron Lady” is moving forward to overturn longstanding Japanese government restrictions on arms exports, providing a boon to both Japanese defense firms and the defense industrial base of the U.S. and its allies. Takaichi’s cabinet has approved the changes that will dramatically expand the types of weapons and defense equipment available, including lethal weapons, for export internationally.
Although Japan has a relatively large military budget of about $60 billion in 2026, Japan’s postwar constitution informed government policies that substantially limited the country’s ability to export military hardware around the world. In 2024, for example, Japanese arms exports accounted for just 0.1 percent of global arms exports.
Tokyo has historically maintained restrictive frameworks preventing weapons exports. Since World War Two, Japanese defense export policy has largely been guided by its Three Principles on Arms Exports and “blanket bans” on exports to multiple categories of countries. Former Prime Ministers Shinzo Abe and Fumio Kishida, however, eased some of these restrictions during their administrations to “deter unilateral changes to the status quo by force and create a desirable security environment for Japan.”
Japan will soon be ready and open for business. Specifically, the changes allow the exporting of lethal weapons to a defined list of partner countries and scraps rules that restricted exports to only rescue, transport, warning, surveillance, and minesweeping equipment.
And countries are already calling. A Polish official has already expressed optimism that “some bottlenecks” in the defense supply chain can be cleared by “having Japan on board.” Australia has also signed a deal with Mitsubishi for three Mogami-class frigates and to “jointly produce eight others.”
The easing of Japan’s defense export rules is occurring at the right time, as the United States experiences its own worsening defense bottlenecks. For Japanese companies like Toshiba and Mitsubishi, the benefits are enormous. Defense contractors that had previously only been able to sell certain high-end combat systems to the Japanese government will now be able to sell to select customers abroad, with all the benefits and cost savings that entail increased volume.
The U.S., which has already signaled interested in expanding co-production and co-development deals with Japan, will likely have a greater appetite for defense industrial base collaboration with Japan’s expanding capacity and ability to export. In 2024, Japan and the U.S. agreed to co-produce AMRAAM (Advanced Medium-Range Air-to-Air Missiles) and Patriot PAC-3 missiles, meaning that Japan can now build the U.S. missile themselves. The new changes will likely prove even more of an incentive for future co-production deals of this variety.
With Japanese firms expanding into new defense supply chains, Japan—and the United States—will be stronger because of it, speeding delivery timelines and expanding options. Japan will be better able to supply other friendly Indo-Pacific nations with more advanced military systems, empowering other U.S. partners and allies to defend their sovereignty and assume greater burdens for providing regional security.
The Philippines, for example, is reportedly interested in acquiring used frigates from Japan to support its expanded deterrence operations in the West Philippine Sea. The Philippines have overlapping territorial claims with China and where China has repeatedly engaged in harassment and physical confrontation with Philippine vessels.
Japan also stands to gain diplomatically. As Japanese defense firms expand, Tokyo’s already substantial influence and reputation will only reach further. Takaichi is ushering in a new role for Japan in international affairs, and the primary catalyst for Japan’s shift is the threat of Chinese aggression, including China’s potential to enforce control over the disputed Senkaku Islands.
Takaichi has also stated that a Taiwan contingency could create a “survival-threatening situation” for Japan while pushing to amend Article 9 of Japan’s constitution to restore “independent sovereignty” and empower its defense forces. As one analyst puts bluntly, Japan is no longer in “the timeout box because of World War Two.”
More developments are likely to emerge in the coming weeks and months, but Japan is moving full steam ahead on important changes to its defense export rules. As the United States and Japan embrace a “New Golden Age” of the alliance, Takaichi’s bold changes further position Japan to serve as a key ally in collective defense and deterrence against China.
Andrew J. Harding is a Policy Analyst for National Security and Indo-Pacific Affairs in The Heritage Foundation’s Asian Studies Center. Wilson Beaver is a Senior Policy Advisor for Defense Budgeting and NATO Policy in the Allison Center for National Security.
