Japan’s Defence Ministry eyes record $51.6bn in spending under Suga – Nikkei

Early Monday morning in Asia, Nikkei Asian Review came out with the news suggesting the extension of Abenomics under Japan’s New Prime Minister Yoshihide Suga.

Key quotes

Japan’s Ministry of Defense will request a record 5.4 trillion yen ($51.6 billion) in the fiscal 2021 budget, seeking a ninth straight year of increases as China rises and new technological threats emerge.

The tally, which also covers Japanese contributions to the U.S. military presence, has topped records every year since fiscal 2015 under now-former Prime Minister Shinzo Abe.

The ministry considers the fiscal 2021 increase necessary in a fast-changing East Asian security landscape that includes Chinese provocations in the East and South China seas and the North Korean missile program.

New Prime Minister Yoshihide Suga has expressed interest in continuing efforts by Abe to bolster Japan’s defenses and diplomatic strategy.

The Defense Ministry requested 5.32 trillion yen for fiscal 2020, receiving 5.31 trillion yen in the initial budget. It has gotten about 40 billion yen less a year on average than it has sought since fiscal 2015.

FX implications

Global markets players are waiting for the Tokyo open to respond to the news. However, an early uptick in the AUD/USD and AUD/JPY quotes, to 0.7300 and 76.30 respectively, seem to have justified the update.