Higher defense spending won’t unsettle markets, government adviser says

Ground Self-Defense Force personnel during a live fire exercise. Japan is considering a new medium-term target to raise defense spending to 3.5% of gross domestic product over 10 years, broadly in line with targets adopted by NATO members and some other U.S. allies. | BLOOMBERG

Sep 28, 2026

Any expansion of Japan’s defense spending will likely be spread over many years and shouldn’t become a source of significant market anxiety in any single year, according to a member of a panel that advises Prime Minister Sanae Takaichi.

“I think this is just a longer-term goal within 10 years, 15 years,” Takuji Aida, chief economist at Credit Agricole, said in an interview on Monday. He said at that pace, it shouldn’t make the market “feel anxiety.”

Aida said Takaichi’s ¥370 trillion ($2.3 trillion) public-private investment plan for strategic sectors, another of her signature policies, is designed to run through 2040, suggesting that higher defense spending would likely follow a similarly long-term framework.

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