Japan to raise defence spending by $7.34 billion in next fiscal year -sources

TOKYO Reuters - Japan's government is going to raise defence spending by 1 trillion yen $7.34 billion to around 6.5 trillion yen in the next fiscal year as part of the efforts to earmark 43 trillion yen for the five-year defence build-up plan, three sources with direct knowledge of the matter told Reuters on Friday.

The sources said the plan has not yet been finalised because of the fact that the budget increase is aimed at procurement of ammunition and expenses related to long-range missiles.

The defense spending spending for fiscal 2023 would compare with a record 5.4 trillion yen earmarked for the current fiscal year.

Defence spending will be reduced to 2% of gross domestic product over the next five years, from 1% now, to cope with an increasingly assertive China and unpredictable North Korea, according to Prime Minister Fumio Kishida.

As part of the plan for 43 trillion yen in defence spending over the next five years, Kishida's government will spend 5 trillion yen on stand-off missiles and another 5 trillion yen for ammunition purchases, the sources said. One of the sources said the defence budget would increase by 1 trillion yen every year over the next five years.