Defense industry of Japan The Japanese defense industry is the major supplier of the nations own Self - Defense Forces . Production costs are high , due to several factors : the successful Japanese economy of the postwar period allowed for generous defense spending ; few products are exported , keeping production numbers low ; research and development is done independently where possible , securing national self - sustainability ; public investment in Japan tends to be uneconomic , aimed largely at gaining local voter support . Postwar history . Dismantled by occupation authorities after World War II , armaments production in Japan resumed shortly before the end of the Allied occupation in 1952 , when the nation ' s manufacturers began repairing and maintaining equipment for United States forces operating in Asia . Individual producers emerged as affiliates of larger industrial conglomerates , including the former zaibatsu of Mitsubishi and Sumitomo . After 1954 the defense industry began to arm the SDF , at first making only slight improvements on United States - designed equipment manufactured for local use . The Japanese defense industry received about US $ 10 billion worth of advanced technology from the United States between 1950 and 1983 . In July 1970 , then Defense Agency director general Nakasone Yasuhiro established five objectives for the defense industry : By the late 1970s , indigenous suppliers had developed and produced an almost complete range of modern equipment , including aircraft , tank s , artillery , and major surface and underwater naval combatants . Certain types of highly sophisticated weaponry , including F - 15 fighters , P - 3C Orion antisubmarine aircraft , and 8 - inch howitzer s , were produced under license . Except for the most complex and costly items , such as the E - 2C airborne earlywarning aircraft , little was purchased complete from foreign suppliers . The FSX . Over 25 % of the ¥18 . 4 trillion Mid - Term Defense Estimate for FY 1986 through FY 1990 was allocated for equipment procurement , most of it domestically produced ; but the most lucrative defense contract was for the FSX . Envisioned as a successor to the F - 1 support fighter in the ASDF inventory , the FSX was expected to take ten years to develop at an estimated cost of ¥200 billion . In October 1985 , the Defense Agency began considering three development options for the FSX : domestic development , adoption of an existing domestic model , or adoption of a foreign model . The agency originally favored domestic development . But by late 1986 , after consultation and much pressure from the United States , it decided to consider a coproduction agreement with the United States . And in October 1987 , Japanese and United States defense officials meeting in Washington decided on a joint project to remodel either the F - 15 or the F - 16 . The Defense Agency selected the F - 16 . Once the agreement was reached , it came under heavy criticism from members of the United States Congress concerned about loss of key United States technologies and technological leadership , risks of Japanese commercialization of technology at United States expense , and an insufficient share in the project for United States - based firms . As a result of the controversy , in early 1989 the United States demanded and obtained a review and revision of the agreement , restricting technology transfer and specifying that United States - based firms would receive 40 % of the work . The controversy left bitterness on both sides , and Japanese industrialists , convinced that a Japanese - designed and Japanese - developed FSX would be superior to a modified F - 16 codeveloped by Japan and the United States , were irritated at United States pressure to renegotiate . They considered the agreement already favorable to the United States . Japanese industrialists and defense planners seem to be inclined to be self - sufficient with respect to future weapons research . The FSX was never built , instead , the Japanese side decided to forgo cooperation with the Americans and develop a successor to the F - 16 completely on their own . The result was the Mitsubishi F - 2 , entering service in 2001 finally . The Japanese aerospace industry is successful , also planning to launch a new Mitsubishi airplane .