Japan Defense Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

Japan Defense Industry Overview

The Japan defense market is semi-consolidated in nature, with the presence of a few prominent players in the market, including Kawasaki Heavy Industries, Ltd., Mitsubishi Heavy Industries, Ltd., ShinMaywa Industries, Ltd, Japan Steel Works Ltd, and Toshiba Corporation.

Despite a strong local manufacturing base, players in the country are currently facing stiff competition from their foreign counterparts for growing their businesses, especially from players from North America and Europe, even with a greater focus on local production and measures like the relaxation of Japan’s self-imposed arms export ban policy. In this regard, local defense giants are undertaking various initiatives and investing in the R&D of new defense systems to produce sophisticated products, thereby enhancing their competitiveness in the market.

Japan has adopted new principles and guidelines on arms exports and would permit arms exports to a country only if they serve the purpose of contributing to international cooperation and its security interests. According to the 2022 defense white paper, nearly 1,100 companies are involved in the manufacture of fighter aircraft, about 8,300 in building destroyers, and around 1,300 in the production of tanks.

Growing support for local aerospace and defense manufacturers and rising investment in research and development boost the market growth during the forecast period. For instance, the Japanese Ministry of Defense (MoD) secured USD 6.23 billion for ammunition-related spending, which is 330% higher than in 2022. It included USD 1.59 billion for the procurement of 500 US-made long-range Tomahawk cruise missiles. The Japanese MoD will deploy the Tomahawks in fiscal year 2026-27 as it aims to develop counterstrike capabilities. Tokyo will acquire the advanced model Tomahawk Block V to be equipped with Japan Maritime Self-Defense Force (JMSDF) Aegis-equipped destroyers.