After years of internal debate, Japan is now stepping up its defense capabilities.

But funding for the new outlays is less certain — and that has put focus on the redemption period of Japanese government bonds (JGBs).

In December, Prime Minister Fumio Kishida announced a drastic revision of the country’s defense strategy, pledging to increase related spending by 50% to around ¥43 trillion ($331.6 billion) by the fiscal year beginning April 2027. The move will see Japan build counterstrike capabilities allowing the targeting of enemy bases and substantially bolster the domestic defense industry.