Japan Defense Market Size
| Study Period | 2018 - 2028 |
| Base Year For Estimation | 2022 |
| Forecast Data Period | 2023 - 2028 |
| Historical Data Period | 2018 - 2021 |
| CAGR | > 2.50 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Japan Defense Market Analysis
The Japan Defense Market is anticipated to register a CAGR of over 2.5% during the forecast period.
Due to the impact of the COVID-19 pandemic, Japan's economy shrank by 4.8% during the year 2020. However, despite the impact of the pandemic on the economy, the defense spending of the country increased by about 1.2% to reach USD 49.1 billion in 2020. This shows that there is an increased focus on the defense sector even during the pandemic. The increase in defense spending is due to the country’s focus on bolstering its defense capabilities amid its tensions with countries like China, North Korea, and Russia. The Japanese government is highly focused on strengthening its defense capabilities due to the Russia-Ukraine war and the Chinese intimidation of Taiwan. Thus, increasing investment in enhancing defense capabilities and procurement of advanced weapons systems drive market growth across the country.
Japan is modernizing its defense arsenal, which involves upgrades in air and maritime defense systems as well as investments in space and cyber capabilities. In order to realize cross-domain operations, the armed forces are planning to acquire and strengthen capabilities in new domains, including space, cyberspace, and the electromagnetic spectrum by investing financial resources into the R&D of such systems, which is expected to drive the market growth.
Japan Defense Market Trends
This section covers the major market trends shaping the Japan Defense Market according to our research experts:
An Increase in Defense Expenditure Will Drive the Market Growth During the Forecast Period
Japan is one of the top 10 countries globally in terms of defense spending. According to the Stockholm International Peace and Research Institute, the Japanese government spends USD 54.1 billion on its defense sector which showed a growth of 7.3 percent from the previous year.
Furthermore, the country’s National Defense Program Guidelines (NDPGs) and the associated Mid-term Defense Plan (MTDP) have also put a strong emphasis on three new defense domains in the country, namely, cyber, space, and electronic warfare (EW). In the defense budget of FY 2021, the Japanese government approved about USD 590 million for space-related projects, which include projects, procurement of Space Situational Awareness (SSA) Satellite (Space-based Optical Telescope), enhancing resiliency of satellite communication system, and others. Similarly, the cyber-related budget was about USD 270 million, which includes the establishment of the Japan Self-Defense Force Cyber Defense Command and spending on projects, like the procurement of a Cyber Information Gathering System and improvement of cyber protection analyzing devices and the defense information infrastructure. In the electromagnetic domain, the government is also planning to develop stand-off electronic warfare aircraft and a network electronic warfare system.
In addition, the country is also spending on the procurement and modernization of fixed-wing patrol aircraft, helicopters, fighter aircraft, destroyers, and submarines. Developments in such domains are expected to be propelled by the growth in defense expenditure, which is driving the growth of the Japan defense market.
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The Air Force Segment Projected to Show the Highest Growth During the Forecast Period
The Air Force segment is expected to experience the highest growth rate during the forecast period. The growth is attributed to the various ongoing procurement plans for replacing the aging combat aircraft and expanding the fighter jet fleet. Japan plans to acquire 42 F-35Bs and a total of 157 F-35s. Japan's Ministry of Defense plans to allocate over 100 billion yen (about USD 905 million) in the fiscal 2022 draft budget for the acquisition of about 10 additional F-35A and F-35B stealth fighter jets.
The armed forces are focusing on enhancing capabilities in the air domain, with an enhanced focus on stand-off defense capability, comprehensive air, and missile defense capability, and deployment capability to effectively counter incoming threats. The country is also working on the development of the Mitsubishi F-X, a sixth-generation stealth fighter for the Japan Air Self-Defense Force. It is Japan's first domestically developed stealth fighter jet and will replace the Mitsubishi F-2 by the mid–the 2030s. In January 2022, the United States department of defense announced a contract worth USD 471 million with Boeing for the development of new systems for Japan Air Self-Defense Force’s (JASDF) F-15 Eagle Super Interceptors fleet. Under the contract, 70 fighters will receive upgrades under Japan’s Super Interceptor programme.
Furthermore, with the relaxation of Japan’s strict arms export regulations, the Japanese Ministry of Defense (MoD) entered an agreement with the British government to develop, design, and procure next-generation air-to-air missiles. Such developments are envisioned to contribute to the growth of the Air Force segment during the forecast period.
Japan Defense Industry Overview
The Japan defense market is moderately consolidated in nature with the presence of a few prominent players in the market including Kawasaki Heavy Industries, Mitsubishi Heavy Industries, 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. For instance, in March 2021, Mitsubishi Heavy Industries (MHI) and Japan’s Ministry of Defense (MoD) concluded a research and prototype production contract to develop a next-generation mine-countermeasure solution. The growth of the local players is being supported by several defense projects currently underway in the country. For instance, as many as 8 major Japanese defense industry firms are collaborating on the country's next-generation fighter jet program development. Such programs are expected to bolster the growth prospects of the players in the country.
Japan Defense Market Leaders
Kawasaki Heavy Industries, Ltd.
Mitsubishi Heavy Industries, Ltd.
ShinMaywa Industries, Ltd.
The Japan Steel Works, Ltd.
Toshiba Corporation
*Disclaimer: Major Players sorted in no particular order
Japan Defense Market News
In October 2022, the United States approved the sale of 32 Standard Missile 6 Block I missiles and MK 21 vertical launch systems to Japan. The value of the contract was USD 450 million. Under the proposed sale, Raytheon Technologies will provide training equipment, spares, engineering services, and logistics support services.
In October 2022, Japan and Australia signed a new bilateral security agreement that covered military, intelligence, and cybersecurity cooperation to counter the deteriorating security outlook driven by China’s growing assertiveness.
Japan Defense Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Overview
4.2 Market Drivers
4.3 Market Restraints
5. MARKET SEGMENTATION
5.1 Armed Forces
5.1.1 Air Force
5.1.2 Army
5.1.3 Navy
5.2 Type
5.2.1 Personnel Training and Protection
5.2.2 C4ISR and EW
5.2.3 Vehicles
5.2.4 Weapons and Ammunition
6. COMPETITIVE LANDSCAPE
6.1 Company Profiles
6.1.1 Kawasaki Heavy Industries Ltd
6.1.2 Lockheed Martin Corporation
6.1.3 The Boeing Company
6.1.4 BAE Systems PLC
6.1.5 Raytheon Technologies
6.1.6 Northrop Grumman Corporation
6.1.7 Thales Group
6.1.8 Mitsubishi Heavy Industries Ltd
6.1.9 ShinMaywa Industries Ltd
6.1.10 The Japan Steel Works Ltd
6.1.11 Toshiba Corporation
6.1.12 Subaru Corporation
6.1.13 Komatsu Ltd
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
Japan Defense Industry Segmentation
The study covers all aspects and provides insights into the budget allocation and spending in the Japanese defense market, along with the forecast estimates. The market includes details about the procurement and modernization plans of the Japan Self-Defense Forces including aircraft, land tactical vehicles, naval vessels, unmanned systems, and military equipment like weapon systems, missile defense systems, missiles, ammunition, etc. The market also includes details regarding investments in the research and development of advanced technologies like directed energy weapons, the use of composites, and advanced manufacturing technologies like 3D printing, among others.
The Japanese defense market is segmented by armed forces and type. By armed forces, the market is segmented into the airforce, army, and navy. By type, the market is segmented into personal training and protection, C4ISR and EW, vehicles, and weapons and ammunition. For each segment, the market sizing and forecasts have been provided by value (USD Billion).
| Armed Forces | |
| Air Force | |
| Army | |
| Navy |
| Type | |
| Personnel Training and Protection | |
| C4ISR and EW | |
| Vehicles | |
| Weapons and Ammunition |
Japan Defense Market Research FAQs
What is the current Japan Defense Market size?
The Japan Defense Market is projected to register a CAGR of greater than 2.5% during the forecast period (2023-2028).
Who are the key players in Japan Defense Market?
Kawasaki Heavy Industries, Ltd., Mitsubishi Heavy Industries, Ltd., ShinMaywa Industries, Ltd., The Japan Steel Works, Ltd. and Toshiba Corporation are the major companies operating in the Japan Defense Market.
Japan Defense Industry Report
Statistics for the 2023 Japan Defense market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Japan Defense analysis includes a market forecast outlook to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.
Japan Defense Report Snapshots
