Updated July 21, 2022
U.S.-Japan Relations
Overview
Komeito, increased their majority in the Upper House of
Japan, a U.S. treaty ally since 1951, is a significant U.S.
Japan’s Diet (parliament) from 57% of the seats to 60%,
partner in several foreign policy areas, particularly security
despite economic difficulties such as accelerating inflation.
and trade. Shared security goals include meeting the
The LDP and Komeito control over 60% of the Diet’s
challenge of an increasingly powerful China and countering
Lower House, giving the coalition a commanding majority
threats from North Korea. The U.S.-Japan mutual defense
in both legislative chambers. Diet elections do not need to
treaty grants the United States the right to base U.S.
be held until 2025, likely giving Kishida a three-year
troops—currently numbering around 54,000—and other
window to promote his policies.
military assets on Japanese territory in return for a U.S.
pledge to protect Japan. The two countries collaborate
Japan’s Changing Approach to Its Security
through bilateral and multilateral institutions on issues such
As perceived threats from North Korea and China have
as science and technology, global health, energy, and
grown more acute, Japan has been reconsidering its security
agriculture. Japan is the fourth-largest overall U.S. trading
situation. With the LDP’s firm control of the Diet, Kishida
partner and largest source of foreign direct investment into
has the power to cement elements of Abe’s long-held policy
the United States, and its investors are the largest foreign
agenda. Kishida supports raising Japan’s defense spending to
holders of U.S. Treasury securities.
2% of its GDP, in line with NATO countries. Japan
traditionally has limited defense spending to 1% of GDP.
The Biden Administration has emphasized the restoration
Although many analysts doubt that Japan will precipitously
of U.S. alliances in Asia and has placed the U.S.-Japan
double its defense budget, the LDP has indicated it intends to
alliance at the center of the U.S. Indo-Pacific strategy. Both
governments distrust Beijing and see China’s rising power
substantially raise it. New iterations of three major
documents—the National Security Strategy, the National
and influence as detrimental to their national security.
Japan’s pr
Defense Program Guidelines, and the Mid-Term Defense
oximity to China—and the two countries’
Program—are due to be published by the end of 2022, and
maritime and territorial disputes—heightens its concern.
will reflect Tokyo’s priorities. The United States has long
Biden has embraced the Quadrilateral Security Dialogue
(“the Quad”) with Japan, Australia
supported Japan investing more in its defense and has a keen
, and India as a primary
interest in the content of these documents.
mechanism to advance shared goals in the region and has
convened three leader-level Quad meetings.
For years, the LDP has been considering whether Japan
Japanese Prime Minister Kishida Fumio acted quickly in
should acquire the ability to launch offensive missile attacks
response to Russia’s invasion of Ukraine, imposing
against adversary bases. The release of national security
sanctions and other financial measures against Russia and
documents this year could establish a policy on pursuing this
pledging $300 million in humanitarian and development aid
capability, a notion many would have considered taboo a
to Ukraine, $600 million in financial support, and
decade ago. Questions remain about how Japan would
shipments of non-lethal military equipment.
acquire this capability, including the extent to which it would
Former PM Abe Assassination
be developed in cooperation with the United States.
On July 8, 2022, an assassin shot and killed former Prime
Kishida has said he would like to explore the process of
Minister Shinzo Abe, arguably Japan’s most powerful
amending Japan’s constitution, a chief Abe goal. The
politician. The shooting stunned Japan, where gun violence
document has not been revised since U.S. officials drafted it
is virtually non-existent and restrictions on gun ownership
during the 1945-1952 occupation of Japan. The LDP supports
are among the strictest in the world. International leaders
amending the language of Article 9, which asserts “the
responded to the news with sorrow and praise for Abe’s
Japanese people forever renounce war as a sovereign right of
role in leading Japan to a more assertive role on the global
the nation and the threat or use of force as means of settling
stage. Abe was known as a key architect of the “Free and
international disputes.” Revising the constitution is a rigorous
Open Indo-Pacific” concept—much of which the United
process, requiring the approval of two-thirds of legislators
States subsequently adopted as its own policy—and a
from both houses of the Diet and then approval by a majority
champion of the Trans-Pacific Partnership (TPP) trade
in a national referendum. Polls indicate the public is divided
agreement. Many of the positions that Abe supported
on whether and what amendments are needed. Komeito, a
domestically, such as raising defense spending and
party with pacifist roots, may not support amending Article 9
amending Japan’s constitution, are likely to remain
in the direction the LDP prefers.
prominent agenda items for the Japanese government.
Ruling Party Increases Hold on Power
The U.S.-Japan Military Alliance
Since the early 2000s, the United States and Japan have
After Abe’s assassination, Japanese leaders moved ahead
improved the operational capability of the alliance as a
with planned national parliamentary elections two days
combined force, despite Japanese political and legal
later. In the vote, the LDP and its coalition partner,
https://crsreports.congress.gov

---

U.S.-Japan Relations
constraints. Japan has accelerated reforms to make its
exports ($112.2 billion) and imports ($167.8 billion), and
military (known as the Self-Defense Forces, or SDF) more
fourth-largest overall trading partner. Several long-term
capable, flexible, and interoperable with U.S. forces. Japan
challenges (e.g., declining working-age population, low
pays roughly $2 billion per year to defray the cost of
productivity growth, and large government debt load) are
stationing U.S. military personnel in Japan. In addition,
perennial economic concerns for Japan. Kishida’s economic
Japan pays compensation to localities hosting U.S. troops,
priorities include supply chain security, for which he
rent for the bases, and the costs of new facilities to support
created a new ministerial economic-security post, broader
the realignment of U.S. troops. The two governments
income redistribution, greater use of digital technologies,
announced a new four-year deal in December 2021 that
and green growth. Japan has pledged a 46% reduction in
continues Japan’s contribution at about the same level.
greenhouse gas emissions by 2030 (from 2013 levels).
A long-standing effort to relocate a U.S. Marine Corps base
Japan’s GDP increased in 2021 by 2.2%, after decreasing
in Okinawa to a less-congested area has divided Japan’s
by 4.5% in 2020, and the government remains focused on
central government and Okinawan leaders for decades.
pandemic economic recovery with continued fiscal and
About 25% of facilities used by U.S. Forces Japan (USFJ)
monetary support. In May 2022, Japan’s parliament enacted
and over half of USFJ personnel are in Okinawa, which
a $21 billion supplementary budget to provide economic
comprises less than 1% of Japan’s total land area.
relief from rising commodity prices, including food and
Okinawans have long expressed widespread opposition to
energy, related to Russia’s invasion of Ukraine. The Bank
new base construction and have chafed at the U.S. military
of Japan, unlike other central banks, remains committed to
presence more broadly. However, recent elections yielded
loose monetary policy, taking actions to prevent interest
victories for LDP-backed candidates, suggesting Okinawan
rate increases. Japan’s relatively lower interest rates have in
attitudes about the U.S. military presence may be shifting.
turn put downward pressure on the yen, which fell to a 24-
The September 2022 Okinawa gubernatorial election will
year low against the dollar in July 2022. Japanese officials
pit incumbent Denny Tamaki—an opponent of the base
have historically lauded a weak yen, but some analysts raise
relocation—against LDP candidate Atsushi Sakima, who is
concerns over its effect on import costs.
seen as more flexible on the transfer.
Figure 1. Top U.S. Trade Partners, 2021
Regional Relations
Tokyo is existentially concerned about Beijing’s growing
economic and military power. A perpetual challenge is a
dispute between the two countries (as well as Taiwan) over
a group of uninhabited Japan-administered islets in the East
China Sea (known as the Senkaku Islands in Japan, and
Diaoyu in China). Despite these tensions, Tokyo and
Beijing have tried to stabilize relations. Wary of China’s
rising influence, Japan has cultivated warm relations with

several Southeast Asian countries, launched a U.S.-Japan-
Source: Bureau of Economic Analysis.
Australia regional infrastructure financing initiative, and
championed the Quad to improve defense coordination and
Trade Agreement Negotiations
buttress the region’s institutions and norms.
The Trump and Abe Administrations negotiated two limited
trade deals liberalizing some agricultural and industrial
Abe was a forceful supporter of Taiwan, and helped move
goods trade and establishing digital trade rules. Some
Japan toward a more muscular framing of the urgency of
Members have called for the United States to join the 11-
defending Taiwan from potential Chinese aggression.
Japan’s approach to supporting Taiwan’s ability to defend
nation Comprehensive and Progressive Agreement for
Trans-Pacific Partnership (CPTPP), which Japan helped
itself—in peacetime and war—depends on several factors,
form after U.S. withdrawal from the proposed TPP in 2017.
including U.S. policies, legal limitations on Japan’s ability
President Biden has indicated he does not intend to pursue
to engage in military conflict, and public opinion.
CPTPP membership at this time. In May 2022, Japan joined
Japan’s relations with South Korea are perennially fraught
13 other countries as an inaugural negotiating partner in the
due to sensitive legacy issues from Japan’s colonization of
U.S.-led Indo-Pacific Economic Framework for Prosperity
the Korean Peninsula from 1910 to 1945. Actions and
(IPEF) initiative, a limited economic arrangement that aims
retaliatory countermeasures by both governments involving
to address some trade issues, such as labor, environment,
trade, security, and history-related controversies caused
and digital trade, but not market access (i.e., tariff
bilateral relations to plummet in the past five years. With
negotiations).
encouragement from the Biden Administration, Tokyo and
Emma Chanlett-Avery, Coordinator, Specialist in Asian
Seoul have taken incremental steps to reverse this trend by
Affairs
attending multiple high-level trilateral and bilateral
meetings, but it is unclear how they will resolve the
Mark E. Manyin, Specialist in Asian Affairs
thorniest historical issues in order to deepen trust.
Brock R. Williams, Specialist in International Trade and
Finance
Economic and Trade Issues
Cathleen D. Cimino-Isaacs, Specialist in International
The United States and Japan, two of the world’s three
Trade and Finance
largest economies, are key trade and investment partners. In
Caitlin Campbell, Analyst in Asian Affairs
2021, Japan was the fifth-largest U.S. trading partner for
https://crsreports.congress.gov

---

U.S.-Japan Relations

IF10199


Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.

https://crsreports.congress.gov | IF10199 · VERSION 22 · UPDATED

---