Japan military costs rise on purchases from US

A live-ammunition drill at Higashi Fuji range in Gotemba, southwest of Tokyo. Japan’s defense spending is expected to set a new record next year. (AP)
Updated 30 August 2019

Japan military costs rise on purchases from US

  • Planned purchases include F-35B stealth fighter jets capable of short takeoff and vertical landing

TOKYO: Japan’s defense spending is expected to set a new record next year as the country deepens its military alliance with the US and spends more on expensive American stealth fighters and other equipment amid threats from China and North Korea.

The Defense Ministry on Friday released its 5.32 trillion yen ($50.3 billion) budget request for fiscal 2020, an increase of 1.2 percent from the current year. It could swell further if Japan agrees to pay more of the cost of stationing American troops in the country or for US-led monitoring of tensions in the Strait of Hormuz near Iran before the budget is finalized later this year and approved by parliament.

Japan’s military spending has risen for seven consecutive years by a total of 13 percent, starting a year after Prime Minister Shinzo Abe took office in December 2012. In 2018 it ranked 8th or 9th in the world in total defense spending, depending on calculation method.

Abe has pushed for Japan’s Self Defense Forces to expand its international role and capability by stepping up cooperation and weapons compatibility with the US, as Japan increasingly works alongside American troops. Abe in 2015 reinterpreted Japan’s pacifist constitution to allow the use of force in defending itself and its allies.

Among the biggest planned purchases are six F-35B stealth fighter jets capable of short takeoff and vertical landing that cost 14 billion yen ($132 million) each, for deployment in 2024. They are the first of 42 F-35Bs that Japan is to acquire in coming years, along with 105 F-35As, for a total F-35 fleet of 147 — the largest number of any country outside the US, and, critics say, more than is needed for a country committed to self-defense. To accommodate the F-35Bs, the Defense Ministry will reconfigure the Izumo, one of two destroyers currently serving as helicopter carriers, beginning later this year with a heat-resistant flight deck and guiding lights at a cost of 3.1 billion yen ($290 million).

Defense Minister Takeshi Iwaya said earlier this month that F-35Bs belonging to the US Marines will also operate on the Izumo, primarily during joint exercises for the defense of Japan and not for independent US missions, addressing concerns that higher levels of integration between the two militaries could increase the risk of Japan becoming embroiled in a US-led conflict.

The arrangement underscores Japan’s expanding role in its alliance with the US as Trump pressures the country to do more. It also is a major shift for Japan’s navy, which has lacked aircraft carriers because of a concern that they would remind Asian neighbors of Japanese World War II aggression.

China’s growing military presence and capability as it strengthens its claims across the South China Sea have unnerved many in the region.

Japan, under its new defense guidelines for the next decade, will set up a military unit specializing in space and beef up measures against cyber and electromagnetic attacks. 

Japan and the US agreed this year to cooperate in defense in space, as China and Russia seek to expand their military capability into space.

The Defense Ministry is seeking 52.4 billion yen ($490 million) to launch a 20-member unit as part of the Air Self-Defense Force to monitor the impact of space debris and potential electromagnetic interference on Japanese satellites. Another aim is to acquire a tracking system using a highly sensitive radar and optical telescope.

While acquiring costly American weapons helps reduce the US trade deficit and enhances military cooperation and compatibility, it is a setback for Japan’s fledgling defense industry. Amid calls for Japan to produce its own replacement for its aging F-2 fighter jets, the ministry will start developing a successor, possibly as a joint international project.

Growing defense costs are also a burden for a fast-aging nation with a declining population.

Japan’s five-year Medium Term Defense Program requires defense spending of 27 trillion yen ($255 billion) through 2024.

Oil falls below $57 on virus impact and OPEC+ delay

Updated 19 February 2020

Oil falls below $57 on virus impact and OPEC+ delay

  • Contagion ‘is spooking market players,’ analysts say after Asian shares fall and Apple issues warning

LONDON: Oil fell below $57 a barrel on Tuesday, pressured by concerns over the impact on crude demand from the coronavirus outbreak in China and a lack of further action by OPEC and its allies to support the market.

Forecasters including the International Energy Agency (IEA) have cut 2020 oil demand estimates because of the virus. Though new cases in mainland China have dipped, global experts say it is too early to judge if the outbreak is being contained.

Brent crude was down 82 cents at $56.85 a barrel in mid-afternoon trade after rallying in the previous five sessions. US West Texas Intermediate crude fell 70 cents to $51.35.

“Risk aversion has returned to the markets,” said Commerzbank analyst Carsten Fritsch.

“OPEC+ has shown no sign yet of reacting to the virus-related slump in demand by making additional production cuts.”

The virus is having a wider impact on companies and financial markets. Asian shares fell and Wall Street was poised to retreat on Tuesday after Apple said it would miss quarterly revenue guidance owing to weakened demand in China.

“This has spooked market players and triggered a sharp pullback in risk assets,” said Tamas Varga of oil broker PVM.

The IEA last week said that first-quarter oil demand is likely to fall by 435,000 barrels per day (bpd) from the same period last year in the first quarterly decline since the financial crisis in 2009.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, have been considering further production cuts to tighten supply and support prices.

The group, known as OPEC+, has a pact to cut oil output by 1.7 million bpd until the end of March.

The next OPEC+ meeting next month is set to consider an advisory panel’s recommendation to cut supply by a further 600,000 bpd. Talks on holding an earlier meeting in February appear to have made no progress, OPEC sources said.

As well as OPEC+ voluntary curbs, support for prices has come from involuntary losses in Libya, where output has collapsed since Jan. 18 because of a blockade of ports and oilfields.