By Takaya Yamaguchi

TOKYO, Reuters – Japan aims “drastically to strengthen” its military capability, according to an Economic Policy Draft seen by Reuters. Officials are concerned that Russia’s invasion in Ukraine will lead to instability in East Asia.

Fumio Kishida the Prime Minister met with Joe Biden Monday to pledge to significantly increase Japan’s defense spending.

Draft, which is an annual update to the long-term economic plan, doesn’t give details about spending. However, it states: “There were attempts to unilaterally modify the status quo through force in East Asia. This makes regional security increasingly serious.”

Although it does not mention security threats to the region, Japan’s military planners repeatedly expressed concern about China. Japan also has a long-running territorial conflict with China.

Biden and Kishida were dominated at the news conference, with the president stating that the United States was willing to use force in order to protect Taiwan against Chinese aggression.

According to the draft, “We will significantly strengthen defence capabilities that are the ultimate collateral to protect national security.”

Nippon Television Network reports that Shinzo Abe was the former prime minister and called Thursday for defence spending exceeding 7 trillion yen ($60billion), up from the initial budget of 5.4 trillion. The increase is in response to China’s increased military spending, as well as missile threats from North Korea.

Abe was quoted saying that “It is natural for the government to secure defense spending equivalent to 2% GDP.” He still holds considerable power as the head of the largest faction of the ruling Liberal Democratic Party.

Kishida is not clear on how much he plans to raise military spending during the fiscal year beginning in April 2023.

Japan’s public finances will be worsened by higher defense spending.

TakuyaHoshino (senior economist, Dai-ichi Life Research Institute) stated that “there’s no end in spending pressure.”

Friday’s lower house approved a budget increase of 2.7 trillion yen. This was funded through bond sales. It is intended to offset the impact on households and businesses from increasing fuel costs and other raw materials. Next week, the upper house of parliament is expected to make the budget law.

Hoshino stated that Kishida is facing a July national election and that a supplementary budget was “almost a done deal”. The question now is how do you secure financing, other than relying on the Bank of Japan’s ultra-low borrowing cost.

($1 = 126.9800 yen)