Japan has finalised its record 7.7 trillion yen (US$54.25 billion) defence budget for fiscal 2024, the second consecutive year in which the country increased defence spending by about a trillion yen from the previous year.
The approved budget keeps Japan on track to boost military spending by 43 trillion yen over five years as it seeks to bolster defences in a complex security environment with an increasingly assertive China and unpredictable North Korea.
The 2024 budget for the year starting April represents an increase of about 17% from the previous year’ spending of 6.6 trillion yen.
It includes over 200 billion yen to strengthen cyber capability as well as funding to start building ballistic missile defence warships with Aegis combat systems, the defence ministry said, estimating the cost per vessel at about 400 billion yen.
To be noted that a collapse in the yen has complicated Japan’s defence build-up, thereby forcing the government to initially reduce its defence procurement plan.
In essence, the currency has lost 10% of its value against the US dollar since the spending plan was disclosed in December 2022.
The ministry said that out of over 9 trillion yen worth of new contracts it plans to sign in the coming fiscal year, almost 2 trillion yen would be settled in foreign currency and could be impacted by currency fluctuation.
(US$1 = 141.9300 yen)
