Japan Defense Market Size Expanding to Surpass USD 68.6 Billion by 2031

Published | 31 October 2025

Japan Defense Market is flourishing because of geopolitical instability, expanding defense budgets, and the escalating cyberthreat landscape.

BlueWeave Consulting, a leading strategic consulting and market research firm, in its recent study, estimated Japan Defense Market size at USD 54.95 billion in 2024. During the forecast period between 2025 and 2031, BlueWeave expects Japan Defense Market size to expand at a steady CAGR of 3.23% reaching a value of USD 68.63 billion by 2031. The growth of Japan Defense Market is propelled by escalating geopolitical tensions with hostile neighboring countries (including North Korea), heightened security imperatives, and a surge in military expenditures with pronounced expansion. During FY2024, Japan defense budget was estimated at JPY 7.95 trillion (approximately USD 56 billion). However, it reached more than 1.5% (approximately USD 71 billion) of the country’s GDP, including supplementary packages, related R&D, and security expenditures.

Opportunity - Surging Demand for Unmanned Systems

An increasing demand for unmanned systems presents a significant growth opportunity for the major players in Japan Defense Market. Major countries including Japan are adopting unmanned systems, such as unmanned aerial vehicles (UAVs), unmanned combat vehicles, and autonomous drones, for various military applications, such as surveillance, reconnaissance, search and rescue operations, and tactical missions. Unmanned systems are equipped with advanced sensors, 360-degree situational awareness capabilities, and autonomous technologies, enabling them to operate remotely or make autonomous decisions without human intervention. It enhances operational efficiency, reduces risk to personnel, and improves mission outcomes. For instance, Japan recently acquired MQ-9B SeaGuardian for the Japan Coast Guard (JCG) to enhance maritime surveillance, and 6 V-BAT vertical take-off and landing (VTOL) drones from Shield AI for the Japan Maritime Self-Defense Force (JMSDF) to support its new patrol vessels. The country’s surge in unmanned systems development is also reflected by advancements in commercial and civilian sectors, where drones are used for purposes ranging from agriculture and delivery to infrastructure inspection. As research and innovation in unmanned systems continue to evolve, these technologies offer an expanding array of applications and further fuel the growth of unmanned systems in Japan Defense Market.

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Impact of Escalating Geopolitical Tensions on Japan Defense Market

Intensifying geopolitical tensions could disrupt the growth of Japan Defense Market. The country, responding to heightened conflict risks and regional instability, is strategically bolstering its military preparedness, thereby driving a substantial surge in defense expenditures. This prioritization manifests in amplified budgetary allocations and strategic investments targeting cutting-edge defense technologies. Consequently, Japan Defense Market experiences a pronounced escalation in demand for sophisticated military assets, encompassing advanced aircraft, next-generation weapons systems, and robust cybersecurity solutions. Furthermore, the prevailing geopolitical uncertainty accelerates the dynamics of arms races and fosters the formation of strategic alliances, further augmenting market dimensions.

Communication Systems Dominate Japan Defense Market

The communication systems segment holds the significant market share in Japan Defense Market by type. It is driven by Japan’s strategic focus on enhancing secure and efficient military communication networks to ensure seamless coordination among defense units. The government is actively investing in advanced technologies, such as encrypted communication systems, satellite-based connectivity, and network-centric warfare solutions. Moreover, the country's broader emphasis on cybersecurity and digital modernization in defense operations reinforces this trend. Initiatives to boost local manufacturing capabilities through collaborations with global defense technology providers further support long-term growth.

Competitive Landscape

Major companies in Japan Defense Market include Lockheed Martin Corporation, The Boeing Company, BAE Systems plc, Mitsubishi Heavy Industries (MHI), Kawasaki Heavy Industries, Mitsubishi Electric, ShinMaywa Industries, IHI Aerospace Co., Ltd, NEC Corporation, Toshiba Corporation, Subaru Corporation, and Komatsu Ltd. The presence of high number of companies intensifies the market competition as they compete to gain a significant market share. These companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches to further enhance their market share.

Don’t miss the business opportunity in Japan Defense Market. Consult our analysts to gain crucial insights and facilitate your business growth.

The in-depth analysis of the report provides information about growth potential, upcoming trends, and Japan Defense Market statistics. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends in Japan Defense Market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyzes the growth drivers, challenges, and competitive dynamics of the market.

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