The Japan Self Defense Forces or JSDF are the unified military forces of Japan that were established after the end of the post-World War 2. Recently they were engaged in international peace-keeping operations. Spending on defense in the next five years from 2015 to 2020 is expected to amount to USD 232.4 billion.
Definition / Scope
The Japan Self Defense Forces or JSDF are the unified military forces of Japan that were established after the end of the post-World War 2. Recently they were engaged in international peace-keeping operations.
The national security council of Japan is an inter-agency body established to coordinate the national security polices of Japan.
The council has its own national security advisor to the Prime Minister and is staffed by 60 officials from the Foreign and Defense ministries.
Market Overview
Owing to the efficient security of the country, Japan has hosted several international events.
It ranks 6th on the Global Peace Index as on 2014.
Despite having one of the lowest crime rates in 2015 worldwide, Japan heavily invests in defense and security of its people and property.
Japan also has a large and sophisticated Self Defense Force as per statistics of 2015.
The active force protecting the country of Japan in 2012 include 2,25,000 personnel.
Us-Japan New Guidelines for defense Cooperation marked a significant development of Japan in establishing the right of collective defense as a part of its National Security Strategy in 2015.
Japan’s top security export nations are China, USA and South Korea.
In May 2015, Japanese Prime Minister Shinzo Abe published a bill to strengthen the country’s security and defense architecture. The proposed changes are largely in response to evolving threats.
The US and Japan agreed to an update in their military relationship on 27th April 2015, which is expected to give Japan’s military greater global presence, while strengthening the ties between the two nations on cyber, space and industrial programs.
Market Risks
Japan’s Self-Defense Force is the most sophisticated armed forces as seen in 2014. Despite of this, Japan’s military is untested in battles, as the country has not engaged in armed conflict since its defeat in the World War 2.
In 2013, Japan’s defense budget fell to USD 53 billion.
Japanese defense expenditure registered a growth rate of -8.7% over 2011-2015, decreasing from USD 60 billion in 2011 to USD 42.6 billion in 2015.
The bill proposed by Shinzo Abe in May 2015 to strengthen the country’s security and defense structure is facing resistance from Japanese lawmakers.
Top Market Opportunities
The new Soryu class is Japan’s most advanced electric submarine.
Japan pays approximately USD 491660 per Soryu sub.
On December 17, 2013 the National Security Strategy was adopted by Cabinet decision. NSS states the basic direction of defense policies related to national security.
Us-Japan New Guidelines for defense Cooperation marked a significant development of Japan in establishing the right of collective defense as a part of its National Security Strategy in 2015.
In fiscal year 2013, Japan scrambled 359 times against Russia aircraft, compared to 473 times in fiscal year 2014.
Opportunities exist under the UK Japan defense collaboration agreement for companies to co-develop different equipment and technology in 2014.
Aviation opportunities are:
Medium lift multi-role helicopters of both maritime and land defense forces.
Opportunities related to systems and training of F-35 A Joint Strike Fighter in 2015.
In the field of maritime, a number of opportunities related to Japan and amphibious force aspiration exist including:
Ship design
Equipment and systems
Because of the success of the London 2012 Olympic and Paralympics Games, Japanese firms are looking to UK companies to bring their expertise and experiences to support Japan 2019 Rugby World Cup and Tokyo 2020 Summer Olympic Games.
The capable areas of interest for companies are:
Cyber security
Chemical, biological, radiology and nuclear.
Counter-improvised explosive device.
Japan’s top security export nations, 2011 to 2013 are:
China
USD 370 million
USA
USD 369 million
South Korea
USD 171 million
Taiwan
USD 133 million
Hong Kong
USD 104 million
Market Drivers
India invited Japan in mid-January 2015 to bid for the Project-India-75 program, a US $8.1 billion project, to purchase 6 diesel electric attack submarines.
The new F-35 Joint Strike Fighter program in Japan, costing US $382 billion is the largest single global defense program since 2015.
Japan’s armaments include tanks, fighter planes, submarines and helicopters.
The tank value in Japan includes Main Battle Tanks, Light Tanks and Tank Destroyers. Japan has a total of 678 tanks, 250 Armored Fighting Vehicles and 500 Towed Artillery. It has a count of 289 Airplane Fighters, 741 Helicopters of which 122 are Attack helicopters and 529 Transport Aircraft.
The total naval strength of Japan is 131.
The number of submarine destroyers is 43. Japan also has 16 submarines and 29 Mine Warfare as per 2015.
The active force protecting the country of Japan in 2012 include 2,25,000 personnel.
2013 marketed an increase of 0.8 % in military spending in Japan from 2012.
The Japan government issued its first National Security Strategy in December 2013 which is a result of government efforts to formulate an integrated and wide range of approach to national security.
The Mid Term Defense Plan defines Japan’s defense policy and capabilities for 2014 to 2018. The Mid Term Defense Plan is meant to give policy makers, politicians and public an understanding of Japan’s defense priorities.
In 2013, the defense budget in Japan was USD 48.6 billion.
In 2014, the Japanese government allocated 19.4% of its defense budget for equipment procurement.16 The total defense imports, 2004 to 2013, amounted to USD 4,045 million in 2013.
Total security imports, 2011 to 2013, were USD 15,017 million
The total security exports, 2011 to 2013, were USD 22,447 million
In 2014, Japan considered on creating a government backed financing arm for weapon exports. As the first step the government planned to call an advisory panel to consider specific proposals to create a way to finance military sales by Japanese firms and fund defense industry cooperation abroad
Capital expenditure accounted for 19.4% share of the overall defense budget in 2014, and includes the attainment of military equipment, material expenses, aircraft acquisition and ship building.
Over 2014, the army recieved 37.4% of the overall budget of Japan which was USD 785.7 billion, while the navy and air force received shares of 23.4% ans 22.3% respectively.
Japan ranks 9th among the world’s top 10 military forces with 247,000 active troops, as per 2015.
Market Outlook
Japan is looking to increase its military capabilities and its manufacturers are trying to edge their way into the profitable domestic global defense market in 2015.
In the next five years, 2015-2020, Japan will buy hardware including drones, stealth aircraft and amphibious vehicles.
Spending on defense in the next five years from 2015 to 2020 is expected to amount to USD 232.4 billion.
Japan’s defense reforms are largely motivated by a need to respond to an uncertain security environment.
Due to increased tension around Senkakes in 2015, Japan plans to establish an amphibious unit by the end of fiscal year 2018.
By 2018, Japan is expected to begin full-scale production of a new generation of powerful missile systems.
Japanese military expenditure, vales at USD 42.6 billion in 2015 is expected to increase to USD 46.4 billion in 2020, registering a CAGR of 1.84% over the forecasting years.
The Japan Air Self-Defense Force is making a major investment in its slow but steady procurement of 42 F-35 A’s.
In 2015, the JASDF will purchase 6 units for USD 84.7 billion, plus USD 14.52 billion for initial expenses to promote industrial participation and USD 14.84 billion for other equipment and training costs.
Japanese companies will manufacture some 24 components of F-35 in 2015.
Key Market Players
The relaxation of Tokyo’s ban on arms exports in 2015 has introduced Japan as a building player in the international arms market.
The leading Japanese defense companies, by sales value in 2013 are:
COMPANIES
KEY MANUFACTURING COMPONENTS
Mitsubishi
Ships, military vehicles, aircrafts and missiles
Kawasaki Heavy Industry
Ships, air craft’s and engines
NEC Corporation
Electronics
IHI Corporation
Ships and engines
Fijitsu
Electronics
Top countries competing with US in defense exports to Japan are:
USA
USD 3,116 million
Canada
USD 47 million
Italy
USD 30 million
Netherlands
USD 11 million
Top countries competing with US in security exports to Japan are:
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