Japan has shifted its defense strategy, moving from a policy of not selling arms to actively promoting its Mogami-class frigate in the international market. A significant milestone was reached with Australia signing a contract in April 2026 for eleven upgraded variants of this vessel. This deal signifies Japan's most substantial arms export initiative since World War II, with Mitsubishi Heavy Industries leading the production, set to deliver the first three frigates by 2029.
The Mogami-class frigate presents various features that enhance its appeal to potential buyers. It is designed for multi-mission operations, including anti-submarine warfare, surface engagements, and air defense, all while maintaining a stealth-optimized structure to minimize radar detection. Operated by a crew of about ninety personnel, it significantly reduces operating costs when compared to other nations' frigates that often require over a hundred crew members. The frigate's operational range of up to 10,000 nautical miles further emphasizes its capabilities, allowing it to cross the Pacific Ocean without the need for refueling.
Japan has taken gradual yet resolute steps towards this export strategy, starting in 2014 when it started relaxing its arms export restrictions and setting clear guidelines for transferring equipment under specific conditions. Previously, Japan's defense industry was confined to domestic production solely for its Maritime Self-Defense Force.
The contract with Australia not only includes the supply of frigates but also incorporates technology transfer and co-production arrangements, enabling Australian shipyards to participate in the construction of these vessels. This collaboration was formalized when Japan's Defense Minister signed the agreement, marking a significant milestone for both countries.
Since the announcement, nations like New Zealand, Indonesia, the Philippines, and Taiwan have shown interest in evaluating the Mogami-class design, signaling the potential for an expanded market in the Indo-Pacific region.
For investors and the broader defense market, Japan's entry into this arena introduces new competitive dynamics previously dominated by European shipbuilders such as Babcock and Fincantieri. With Australia's adoption of co-production capabilities for Mogami-class ships, a model may emerge that establishes Japan as a central player in regional defense manufacturing.
However, the sensitivity around Japan's arms export policies remains. The potential sale of frigates to Taiwan poses diplomatic challenges, highlighting the complexity of Japan's relationships with China and Taiwan. Whether Japan will approve such sales remains uncertain but is likely to be closely monitored by both markets and governments worldwide.