Japan's global defense business may be on the cusp of a big breakout

SAN ANTONIO, ZAMBALES, PHILIPPINES - APRIL 28: A Japanese Self-Defense Forces personnel carried a Japanese national flag in front of missile systems, during an Integrated Air and Missile Defense (IAMD) drill, as part of the ongoing Balikatan (Shoulder-Shoulder) multinational exercise, at a naval base in San Antonio, Zambales, Philippines, on April 28, 2026. The IAMD exercise, which sees the deployment of troops and missile systems from the United States and Japan, comes at a time of escalating tensions in the disputed South China Sea and the Taiwan Strait, with the Chinese People's Liberation Army increasing military activities in the water and Beijing denouncing Tokyo's strengthened defense cooperation with the Philippines. (Photo by Daniel Ceng/Anadolu via ) Anadolu | Anadolu | Japan easing decades-old restrictions on arms exports opens a big opportunity for the country's defense industry in a world increasingly hungry for weapons. The global conditions seem favorable. On April 27, SIPRI reported that global military spending hit a record of $2.89 trillion in 2025, the 11th straight year of increase. Countries are "desperate" to acquire weapons such as air defense missiles, artillery shells and armored vehicles, areas where Japan Inc. might expand its market share in the international defense economy, Hirohito Ogi, senior research fellow at the Tokyo-based Institute of Geoeconomics, told CNBC in an interview. …