Japan is set to allocate 40 trillion to 43 trillion yen ($295 billion to $318 billion) for military spending over five years from the next fiscal year that begins in April, reports say.
That's a relative jump from the current five-year military plan to spend 27.5 trillion yen and raises concerns that it will aggravate one of the industrial world's worst debt burdens, which amounts to twice the size of Japan's annual economic output.
The new figures show a compromise between the defense and finance ministries, Reuters said. Until recently, the defense ministry had sought 48 trillion yen, whereas the finance ministry had multiple options centering around 35 trillion yen.
On Monday, Prime Minister Fumio Kishida told his ministers that they should work on a plan to increase military spending to an amount equivalent to 2% of gross domestic product within five years, from 1% now.
"It won't be critical to spend some 40 trillion yen. The question is whether the government could secure funding sources and whether we can let the money flow through domestic defense and related industries to back the economy," said Takuya Hoshino, senior economist at Dai-ichi Life Research Institute. "If we spend the money to buy weapons and other military goods overseas, that would trigger capital outflows and yen depreciation."
The rise in military spending comes amid a push among Japanese leaders to discard the country's pacifist constitution despite opposition from the public.
The constitution, which has been in place in its original form since it was drafted following Japan's World War Two defeat in 1947, was engineered to prevent the country from waging war and maintaining a military.
The US, however, is currently the key driver in spawning the seeds of militarism in Japan again as it seeks to mobilize allies in Asia to keep China in check.
Last year, Japan and the United States announced plans for naval drills in the South China Sea, as part of their first-ever anti-submarine war games in the territorial waters.
In recent years, Tokyo has put forth orders for scores of US-designed F-35 stealth fighter jets capable of vertical take off and landing amid plans to transform some of its existing ships into aircraft carriers.