A collapse in the yen is forcing Japan to scale back a historic five-year, ¥43.5 trillion defense buildup plan aimed at helping to deter a Chinese invasion of Taiwan, according to eight people familiar with the matter.
Since the plan was unveiled in December the yen has lost 10% of its value against the dollar, forcing Tokyo to reduce its ambitious defense procurement plan, which was then-calculated to cost $320 billion, the sources said.
Reuters interviewed three government officials with direct knowledge of defense procurement and five industry sources, who said Japan will begin cutting back on aircraft purchases in 2024, the second year of the buildup, due to the weak yen.