Crisis, continuity, and change: Japan’s strategic outlook in 2026 and beyond

Professor Akiko Fukushima presenting at the Foundation's Asia Symposium in May 2026

My speech title today is “Crisis, continuity and change: Japan’s strategic outlook in 2026 and beyond”. Standing in May 2026, we in the Indo-Pacific feel the impacts of numerous crises elsewhere. I also recall the former Japanese prime minister Fumio Kishida’s remark in 2022 that “Ukraine today maybe East Asia tomorrow”. Japan today faces similar if not common crises with New Zealand and beyond. These crises have triggered changes in some areas, while continuity persists in others. Let me expand on these ‘three Cs’.

The merging of politics and economy

Firstly, on change, the days when we could discuss politics and the economy separately are over. We are even witnessing the weaponisation of the economy. Observing the interconnections between politics, security and the economy, I am reminded of Goethe’s Faust. In Part 2: Act V of Faust, Mephistopheles predicts that war, trade and pirates constitute a trinity that cannot be separated. This is exactly what we face today.

Thus, the concept of ‘geoeconomics’, or economic security, has taken root in our conversation. The US, under the second Trump administration, has adopted not only security policies, but economic ones too to achieve MAGA’s political aims, even at the expense of US allies and partners. The US’s tariff policies, though illegal according to the country’s own courts, have compelled US trading partners to negotiate deals with it in order to avoid punitive tariffs. Other states, meanwhile, also use economic coercion to achieve their own political aims. The WTO certainly remains but to no avail.

President Donald Trump signs an executive order on the administration’s tariff plans at a “Make America Wealthy Again” in April 2025 (Photo: Wiki Commons; Author: White House)

The COVID-19 pandemic taught us how essential supply chain resilience is. The ongoing war in Ukraine has certainly affected Japan’s security and economy. It has also demonstrated that the modality of war has changed to one involving cyber and AI-driven military equipment, including unmanned drones, on top of traditional weapons such as tanks. Moreover, I would like to underscore that the crises have shattered the rule of law. We are losing the international order without its replacement.

Divisions and bonding

Another change I observe is that the crises have divided some of us while bonded others. We could see the change in the balance of power as we watched the US-China summit on 14-15 May on building constructive strategic stability. The crises have driven a wedge between the US and its allies. Having witnessed the deepening divide in the Trans-Atlantic alliance, the Indo-Pacific now wonders how much the US will remain committed to the regional security. The option of alliance or autonomy is not a new subject of debate but has been the perennial agenda between the US and its allies and partners, including Japan, but the question is looming larger today.

US President Donald Trump and China’s President Xi Jinping during Trump’s visit to China in May 2026 (Photo: wiki Commons; Author: White House)

On the other hand, the Ukraine war has spurred a phenomenal strengthening of relations in Japan’s neighborhood among China, Russia, North Korea and Iran (CRINK). This is perhaps best demonstrated in the provision of arms and soldiers from the DPRK to Russia and in Russia’s provision of technological assistance to the DPRK’s missile programme. In mid-2024, the two signed the Russia-DPRK Treaty on Comprehensive Strategic Partnership. Russia and China have also enhanced their friendship with ‘no limits’, as illustrated by the provision of arms and the purchase of energy, as well as their frequent joint exercises around the Japanese archipelago. Although such bonds are currently more bilateral rather than multilateral, CRINK may further strengthen their relations as a group.

A blip or structural?

As we witness both changes and continuity, another question we face is whether the US foreign and security policy today is unique to President Trump or a longer-term retrenchment. This is a hard question to answer. Having spent my graduate school life in the US in the 1990s, I do feel that the United States is changing. However, the move away from being the ‘world’s policeman’ started with remarks from President Obama and is not new. The US is no longer interested in maintaining the liberal international order or free trade. This is more of a structural change. On the other hand, the US may need more predictability and a less transactional approach for its own sake. In considering Japan’s strategic outlook, I would like to bear this in mind, distinguishing it from a blip and more of a structural change.

Now let me turn to Japan’s strategic outlook in 2026 and beyond. In the context of the three Cs, I personally believe Japan needs to pursue three As, namely: alliance, autonomy and alignment.

Alliance

U.S. Air Force Col. Richard McElhaney delivers remarks during the Japan-America Air Force Goodwill Association Award Ceremony at Yokota Air Base, Japan, in March 2025 (Photo: Wiki Commons; Author: White House)

Let me start from the alliance, which is Japan’s Plan A. Many of you may have read the aptly titled recent Financial Times article, “The country that can’t say no to Trump”. Japan’s alliance with the US has long been the cornerstone of Japan’s foreign and security policy. The majority in Japan consider that the Japan-US alliance is indispensable for Japan and will remain so for a foreseeable future. Japan-US leaders’ summits have confirmed to strengthen the alliance not only for Japan’s national security but also for the region. In a March opinion poll by the Yomiuri Newspaper and the Japan Institute for International Affairs), 93 percent responded that the US-Japan alliance is indispensable, pointing to China’s rise and a nuclear-armed DPRK as reasons why.

With recent developments, many have discussed whether Japan should stick to the alliance or explore more autonomy. I hasten to add that the question of alliance or autonomy is not new but has long been debated in Japan. Here I observe continuity. According to an 8 May 8 Asahi Shimbun opinion poll, 93 percent of the Liberal Democratic Party’s Lower House members and 48 percent of the public polled say that the US-Japan alliance should be further strengthened. Japan does not have good alternatives to the US alliance. Meanwhile, witnessing recent crises, whether plan A, or the alliance with the US, is still essential for Japan is the subject of debate – what is clear is that plan A alone is not tenable. But nor is plan B or full autonomy. What Japan needs is ‘plan A plus’.

Autonomy and resilience

This ‘plus; leads me to discuss the next A, namely autonomy. Japan has lately strengthened its own defence capabilities and economic security. Based on the 2022 National Security Strategy, Japan has increased defence spending to two percent of GDP to strengthen its defence, deterrence and response capabilities including its counterstrike capability. Since 2015’s security legislation, Japan has increased participation in multinational exercises by signing visiting forces agreements with Britain, Australia and the Philippines. Japan has launched the Japan Joint Operations Command (JJOC) to coordinate Self Defense Force activities with foreign counterparts. Japan is also in the process of enhancing its cybersecurity. Japan has also been facilitating intelligence sharing with a new national security clearance system, a new active cyber defence law and a law establishing a new national intelligence agency enabling the government to collect and share foreign data related to suspected cyberattacks, mandates the reporting of cybersecurity incidents by operators of critical infrastructure, and streamlines related institutions. This legislation is intended to facilitate more rapid threat response, intelligence sharing, and international cooperation.

In strengthening its defence capabilities, Japan promotes defence industrial cooperation including co-production and co-development. For example, in 2022, Japan launched the Global Combat Air Program (GCAP) to develop a next generation stealth fighter with the UK and Italy by 2035.

Australia has agreed to purchase 11 Mogami-class frigates (pictured) from Japan at a cost of some AU$10 billion

Australia has recently decided to procure and build 11 of Japan’s Mogami-class frigates for the Royal Australian Navy and New Zealand is reportedly considering procuring frigates either from the UK or Japan. Earlier in May, Japan’s frigate JS Kumano visited Wellington as a part of its deployment training. I will keep my fingers crossed for the final decision by the New Zealand government.

To promote defence industry cooperation, Japan has recently revised its three principles on the transfer of defence equipment and technology, scrapping rules that limit exports to five noncombat categories – rescue, transport, warning, surveillance and minesweeping. This means Japan can now sell lethal weapons to the 17 countries with which it has defence agreements. A ban on arms sales to countries involved in conflict will stay.

Japan has also provided official development assistance and official security assistance (OSA) to assist their needs for capacity building. Japan has been working on capacity building in the region while OSA is a new instrument for further responding to regional needs.

Japan is enhancing cooperation and alignment with likeminded partners in the region and beyond. This is not new as cooperation with likeminded partners was clearly mentioned in the 2013 National Security Strategy and is part of ongoing efforts to enhance Japan’s security cooperation with likeminded partners over the past decade.

How does the Japanese public observe these changes? The Yomiuri-JIIA opinion poll I cited earlier asked whether Japan’s defence should be strengthened and 74 percent responded yes’, although 79 percent said that Japan should not own nuclear weapons. The path to autonomy for Japan is tough and must be steered carefully.

Japan also pursues economic security, starting from supply chain resilience through to the protection of sensitive technologies. Resilience is a way to secure autonomy across economic, social and security domains. Japan enacted the Economic Security Promotion Act in May 2022. The Japanese government elevated the significance of economic security by incorporating it into the 2022 National Security Strategy, securing supply chains, ensuring the reliability of core infrastructure, cultivating and preserving advanced technologies, and introducing the non-disclosure of patents on sensitive technologies system. This pursuit of resilience is a way to keep its autonomy sufficient to respond to economic coercion. Economic security will be an important element in the upcoming 2026 National Security Strategy.

Alignment and cooperation

Finally, let me turn to the third A, alignment. Japan’s aforementioned security and defence cooperation with the likeminded partners in the region is surely a path for alignment.

In Prime Minister Takaichi’s recent visit to Canberra and telephone conversation with Prime Minister Christopher Luxon, she explained that Japan tries to build multi-layered cooperation through bilateral, mini-lateral and multilateral ties. One example of mini-lateralism is the Indo-Pacific Four, of which both New Zealand and Japan are members.

Japanese Prime Minister Sanae Takaichi meeting with Australian Prime Minister Anthony Albanese in Camberra this year (Photo: wiki Commons; Author: Japan Cabinet Secretariat)

Japan has taken initiatives to foster wider regional cooperation beyond Asia, as reflected in its Free and Open Indo-Pacific (FOIP) initiative as well as its role in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Japan was long known for ‘leading from behind’ in regionalism. Japan more recently, however, has shifted to a more overt leadership role, best illustrated by the FOIP launched by former prime minister Shinzo Abe in 2016 with its three pillars of the rule of law, connectivity and capacity building assistance. The initiative itself was received with mixed reactions. ASEAN, after its initial criticism, issued its own vision in the form of the ASEAN Outlook on the Indo-Pacific (AOIP) in 2019. Most notably China, criticised Japan’s FOIP for competing against its Belt and Road Initiative, and that Japan intends to contain China with the FOIP strategy.

After an initial few years of debate on the concept, the strategy and the notion of the Indo-Pacific have taken root in the region and beyond, launching respective Indo-Pacific concepts. This is a new approach to multilateral cooperation, not starting from institutionalisation but from the concept or vision. Those who share the concept explore possible cooperation. Meanwhile in Japan, successive prime ministers following Prime Minister Abe have inherited the FOIP without changing the adjectives ‘free’ or ‘Open’. The incumbent prime minister Sanae Takaichi launched her updated FOIP vision in early May 2026 during her visit to Viet Nam. The updated FOIP underscores resilience and autonomy based on supply chain resilience, the co-creation of economic growth through rules, and security cooperation.

Another illustration of Japan’s leadership is its role in concluding the CPTTP. Although Japan was late in joining the TPP negotiations, when President Trump declared the US’s withdrawal from TPP in January 2017, Prime Minister Abe worked to draft and sign the CPTPP with the remaining 11 countries. Prime Minister Takaichi in a May speech also stressed the expansion of the CPTPP.

From a Japanese perspective, Japan tries to work together with willing and interested partners in the region, who share common concerns and interests. This is reflected in the approach of ‘co-creation’ with ASEAN. This is illustrated by the Asia Zero Emission Community (AZEC) which was launched by Prime Minister Kishida in January 2022. AZEC aims to achieve a ‘triple breakthrough’ in the areas of climate change, inclusive growth, and energy security.

In response to the current energy crisis, on 15 April 2026, Prime Minister Takaishi convened the ‘AZEC+ Online Summit on Energy Resilience’ and launched the Partnership on Wide Energy and Resources Resilience (POWERR Asia). In addition to the 11 AZEC countries, the summit included South Korea, India, Bangladesh, Sri Lanka, and Timor-Leste, together with the IEA, ADB, and ERIA. Prime Minister Takaichi announced AZEC’s evolution into ‘AZEC 2.0’, stating that “AZEC will be advanced by adding the perspective of economic and energy resilience”.

Prime Minister of Viet nam Lê Minh Hưng during talks with Prime Minister Takaichi's visit in May 2026

POWERR Asia is a USD10 billion (¥1.5 trillion) financial cooperation initiative comprised of two tiers: an emergency-response layer providing credit enhancement and financing for fuel procurement and supply-chain maintenance; and a structural-response layer addressing regional stockpile-release mechanisms, storage infrastructure, critical mineral security, and efficiency-driven industrial and energy diversification.

Now, in the context of multi-layered cooperation mechanisms, you may be wondering about Japan’s bilateral relations with its neighbour, China. For Japan, its relations with China are extremely important. Since 1972, Japan has pursued deterrence and dialogue with China. Sino-Japan relations, however, have gone through ups and downs and since last November bilateral relations have soured. When Prime Minister Takaichi first took office, both governments signaled a willingness to engage as Prime Minister Takaichi and President Xi met at the sidelines of the APEC leaders’ meeting and reiterated their goal of building a mutually beneficial relationship based on common strategic interests. The mood shifted abruptly in early November after Prime Minister Takaishi responded to the question that a military escalation over Taiwan could constitute an existential threat to Japan which may lead to the exercise of collective self-defence. Her response to the question was not declaring the Japan would defend Taiwan but that it may protect US forces, should the the US intervene, as stated in Japan’s 2015 security law.

Nevertheless, referencing a Taiwan scenario so explicitly in the debate was an unusually concrete move for a sitting prime minister.

China reacted to Takaichi’s remarks with sharp criticism, demanding a retraction as well as imposing economic measures against Japan, such as a travel warning for Chinese citizens, a ban on Japanese seafood imports, and a ban on rare earth exports to Japan.

I strongly hope to forge a more stable and productive relationship with China using all possible channels of dialogue, and to build a mutually beneficial relationship based on common strategic interests.

Ways ahead

To conclude, in response to the three Cs of crisis, continuity and change, I trust that Japan needs to pursue the ‘three As’ – alliance, autonomy and alignment – concurrently. Moreover, I believe this is not a time to act alone but for the likeminded partners to act collectively.

This reminds me of a story of the sixteenth century Japanese warlord, Motonari Mouri. He told each of his three sons to take an arrow to break, which they did easily. Mouri then grouped three arrows together and ordered each son to break the arrows at once. No one could do it. The lesson was: “One arrow is easy to break, but when three arrows bond together, they are unbreakable”, a metaphor for surviving in a world of rival warlords.

When we discuss “a middle power moment”, we have to realise that we can be more proactive, influential and indispensable regardless of the sizes of our economies. Together we can better face crises, continuity and change.

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The Foundation's Asia in Focus initiative publishes expert insights and analysis on issues across Asia, as well as New Zealand’s evolving relationship with the region.