Japan’s draft 2026 foreign ministry budget contains a striking increase in a little‑known line item called “Government Security Capability Enhancement Support” (OSA). The allocation jumps from 2.0 billion yen in 2023 to 18.1 billion yen for 2026, a near tenfold rise that reflects a deliberate shift from strictly defensive postwar posture toward outward security engagement.
Launched in April 2023, the OSA mechanism authorises Japan to transfer military equipment abroad and to finance infrastructure and training for partner countries under the legal framework of the “Three Principles on Transfer of Defence Equipment and Technology.” Initially marketed as non‑lethal assistance — coastal surveillance radars, small patrol boats and satellite communications — the package is moving toward higher‑end systems such as reconnaissance drones and long‑range radar, and it now supports a widening geographic footprint.
The programme began with four pilot partners in Southeast Asia and the Pacific and has expanded to a dozen recipient states by 2025, including the Philippines and Indonesia, with Cambodia and Vietnam reportedly under consideration. Tokyo’s approach is calibrated: supply low‑sensitivity items first, build maintenance and training ties, and normalise defence collaboration so that deeper forms of military cooperation — and eventually defence industrial ties — become politically and commercially feasible.
The political context is as important as the hardware. For decades Japan’s self‑defence doctrine and strict export norms constrained outward arms sales. But policymakers in Tokyo increasingly frame OSA as a means to “improve the security environment around Japan,” aligning with U.S. priorities in the Indo‑Pacific while carving out a more autonomous regional role. Recent signals from the government about further loosening the Three Principles would remove remaining limits that once confined exports to rescue, transport, surveillance and mine‑clearing.
Beyond geopolitics, the economic logic is clear. OSA can seed foreign markets for Japan’s defence industry, create long‑term maintenance and upgrade contracts, and absorb domestic industrial capacity that expanded under recent rearmament policies. That commercial pathway — aid leading to procurement and then to servicing and upgrades — creates a durable industrial linkage between Tokyo and beneficiary states.
For neighbours and recipients the consequences will be mixed. Small island and Southeast Asian states may welcome improved maritime domain awareness and the cost‑free transfer of capabilities. But for China, the Korean Peninsula and others, Japan’s normalization of outward defence engagement will be interpreted as strategic encroachment, increasing regional distrust and potential arms competition. The risk profile rises further if policy changes permit the export of lethal weapons under programmes that began as non‑lethal assistance.