The Impact of Yen’s Collapse on Japan’s Military Buildup
The yen’s recent plunge to its lowest point in almost 40 years is posing significant challenges to Japan’s ambitious plans for its most extensive military expansion since World War II. The diminished value of the yen has led to a reduction in defense capabilities and potential cutbacks in military equipment procurement.
Japan heavily relies on purchases of military hardware from American suppliers, with transactions conducted in dollars. Consequently, the Japanese government’s purchasing power has been severely affected by the yen’s depreciation, making it difficult to meet the intended defense spending targets.
Former Japanese Defense Minister, Satoshi Morimoto, expressed concerns about the misalignment between the country’s actual defense capabilities and its strategic objectives. He highlighted that the defense budget for the next five years has effectively decreased by 30% due to the currency devaluation.
Japan’s currency predicament comes at a crucial time as the nation faces escalating threats such as missile launches from North Korea and geopolitical tensions with China, including the risk of a potential conflict between China and Taiwan.
In response to these challenges, Prime Minister Fumio Kishida unveiled a new national security strategy in 2022, aiming to more than double the defense budget. The proposed budget of 43 trillion yen over five years, equivalent to approximately $319 billion at the time, was intended to enhance Japan’s deterrence capabilities by enabling preemptive strikes on enemy bases.
This significant increase in military spending marked a departure from Japan’s traditional budget constraints and reliance on U.S. military support. Prime Minister Kishida described the surge in defense expenditure as a pivotal moment in Japan’s history, emphasizing the country’s commitment to strengthening its national security.
