Protests have returned to the streets of Tokyo. Recently, tens of thousands of Japanese gathered in front of the National Diet, waving glow sticks, holding placards reading "Don't drag us into war," and chanting slogans demanding the prime minister step down and an end to politics that follow Washington's lead.
Such scenes have appeared repeatedly outside the Prime Minister's Office and the Ministry of Defense, as Japan's government continues deploying missiles and pushing to revise its three national security documents despite sluggish growth and heavy fiscal burdens.
"The United States wants Japan to buy more American weapons and reap huge profits. Japanese politicians, for their own interests, want U.S. political support and election help, so they lean toward meeting Washington's demand to raise military spending," said Chen Yan, executive director of the Japan Enterprise (China) Research Institute.
Japan's defense budget for fiscal 2026 hits another record of about 9 trillion yen. Japanese media reported that the Trump administration has repeatedly urged Japan in closed-door meetings to raise defense spending to 3.5 percent of GDP -- a commitment that would impose a heavy fiscal burden on Tokyo.
Liu Jiangyong, a professor of international relations at Tsinghua University, said Japan faces a dilemma of "a shrinking economy and an expanding military": between 2015 and 2025, defense spending rose about 5 percent a year while average economic growth was only 0.5 percent.
The Asahi Shimbun estimated that raising defense spending to 3.5 percent of GDP would mean annual outlays exceeding 20 trillion yen.
To fund it, the government can issue more debt -- but Japan's debt is already more than twice its GDP, and the IMF expects government interest payments to double by 2031 compared with 2025. Alternatively, it can cut spending, which risks squeezing medical care and pensions as the population ages.
Rising food prices have pushed some young Japanese to skip meals altogether, making fiscal trade-offs a matter of daily life rather than distant budget figures.
Kyodo News reported that the government sees the corporate tax as a stable source of funds and has discussed raising it to finance the buildup. Masayoshi Tsutsui, chairman of Keidanren, said such a move would pour cold water on the capital and R&D investment businesses are trying to expand.
Foreign visitors are another revenue source: visa fees have risen fivefold, fees for permanent residency twentyfold, and some transport costs are climbing.
The costs extend beyond Japan's borders. As a trade-dependent economy, Japan's auto, electronics and semiconductor industries rely on overseas markets and cross-border supply chains. Chen noted that Japan's economy is about 2.3 times the size of South Korea's, yet its trade with China is similar in volume to South Korea's, suggesting Tokyo has not fully used the Chinese market.
