Japan planned a five-year defense program to prevent Chinese ‘aggression’ in Taiwan. This will cost 43 trillion yen. But Japan is forced to retreat due to the decline of the local currency against the dollar.
The yen has lost 10 percent against the dollar since the plan was unveiled last December. In terms of dollars, this cost was 32 thousand billion dollars.
Reuters interviewed three government officials with direct knowledge of the matter and five industry sources. They said Japan would start reducing aircraft purchases in 2024, the second year of the plan, due to the weak yen.
Details of how Japan is delaying military purchases due to currency fluctuations have not been previously disclosed. The eight people, who have attended numerous meetings on the purchase, said on condition of anonymity that they are not allowed to speak to the media.
In the summer of 2021, one dollar was worth 108 yen. This rate is taken at the time of making the purchase plan in December. But in early November, the currency fell to 151 against the dollar. Last Tuesday, the Bank of Japan took a small step toward ending a decades-long monetary program. This led to a major devaluation of the yen.
In this regard, Christopher Johnstone, head of the Center for Japan of the Strategic and International Studies think tank, said, for now, the effect is small. There is no question that a long-term depreciation of the yen will reduce the thrust of Japan’s plans.
However, neither the Japanese Defense Ministry nor their military allies, the US Embassy in Tokyo or the Pentagon, have commented on the matter.
Prime Minister Fumio Kishida described the defense plan as Japan’s biggest ‘turn around’ since World War II. According to the Defense White Paper, it will be spent on dealing with potential conflicts around Taiwan and islands in the East China Sea. Tokyo also shares responsibility for protecting US bases on its soil. Washington will use these bases to retaliate against Chinese forces invading self-ruled Taiwan.
Last December, Kishida pledged to double annual defense spending to 2 percent of GDP. This makes the war-torn country the third largest military spender in the world. Even two years ago, such a move was considered impossible by the lawmakers of the country.
Originally, after the Russian attack on Ukraine in February 2022, there was a new concern for Tokyo about whether the attack would embolden Beijing to attack Taiwan. In addition, China’s missile launch in waters near Japanese territory in response to US action raised new fears. Added to this is US House Speaker Nancy Pelosi’s visit to Taiwan, tension surrounding China’s exercises with Russia.
China has never ruled out using military force to bring Taiwan under control. However, expressing concern over Japan’s military spending plans, Tokyo is exhibiting a “nervous war” mentality. Source: Reuters