U.S. Awards $579M Contract to Enhance Japan's Aegis Defense

The U.S. Department of Defense awarded a $579 million contract to Lockheed Martin to enhance Japan's missile defense capabilities with the Aegis Combat System.

Under the contract, the company will develop, test, and integrate hardware, software, and equipment to support the Aegis-equipped ship [ASEV] for Japan. The system is expected to be fully integrated by August 2026. This award follows a deal ratified by Japan’s Ministry of Defense in October 2024, marking a critical step in the nation's ongoing effort to modernize its defense infrastructure.

Japan is building two new destroyers equipped with Aegis systems, with a total cost of approximately ¥272.1 billion ($1.89 billion). These ships, designed to enhance Japan’s ballistic missile defense, are set to enter service in 2027 and 2028. Mitsubishi Heavy Industries and Japan Marine United Corp. have been contracted to build the destroyers, which will replace two previously planned Aegis Ashore systems.

These destroyers will play a central role in Japan's defense strategy, particularly in countering North Korea’s missile threats. The ships will feature Aegis radar and weapon systems, including Type-12 anti-ship missiles, Tomahawk long-range cruise missiles, and Lockheed Martin’s SPY-7 radar. The new ships will expand Japan’s fleet of Aegis-equipped destroyers to ten, aligning with the objectives of the 2022 Defense Buildup Program.

In addition to these new vessels, the Japanese Ministry of Defense is considering future replacements for the aging Kongo-class destroyers. However, fiscal constraints, including a weakened yen and the potential need for tax increases, may lead to a more cost-effective upgrade program for these older ships in the short term.