In a landmark defence pact, Japan has won an A$10 billion (US$6.5 billion) contract to construct fourth-generation warships for Australia — Tokyo’s largest arms export agreement since it ended its decades-long ban on military exports in 2014. The decision is a turning point not only for the defence industry of Japan but also for Indo-Pacific security alliances amid increased anxiety over China’s military aggressiveness.
The deal, unveiled on August 5, will see Mitsubishi Heavy Industries (MHI) deliver the first three of eight Mogami-class multi-role frigates to the Royal Australian Navy by 2029. The state-of-the-art warships, which are designed to be versatile and operationally efficient, will be manufactured in Japan, with the other eight being constructed by Austal in Western Australia.
A Strategic Milestone for Japan
The agreement is a significant geopolitical and industrial achievement for Japan. It speaks to Tokyo’s changing role in regional security, pushing its defence cooperation beyond the traditional Japan-U.S. alliance. Japan’s Defence Minister, Gen Nakatani, called the agreement a “major step forward” in deepening trilateral cooperation between Japan, Australia, and the U.S.
MHI’s success in securing the contract also helps Japan rebound from a 2016 setback, when Australia rejected its submarine bid in favour of a French design—a deal that was later scrapped for the AUKUS nuclear submarine pact with the U.S. and U.K. This frigate contract now becomes Australia’s largest naval purchase after the nuclear submarine deal.
Cutting-Edge Capabilities
The modernised Mogami-class frigates are capable of undertaking several missions, such as anti-submarine warfare, surface warfare, and air defence. Being equipped with a minimalist crew of only 90 sailors, the vessels are very automated and more efficient than existing Australian warships, which can have a crew of more than 180 sailors.
Another standout feature is the frigates’ impressive operational range of up to 10,000 nautical miles, a major improvement over the Anzac Class frigates currently in use, which have a maximum range of 6,000 nautical miles. These capabilities will bolster Australia’s ability to secure vital maritime trade routes and project power across the Indian and Pacific Oceans.
Deepening Industry and Security Ties
The sale is more than a military sale — it’s a sign of deeper technology and economic cooperation between Australia and Japan. MHI highlighted the sale’s promise of enhanced defence-related human resource development and industrial capability in both countries.
Australian Defence Minister and Deputy Prime Minister Richard Marles emphasised the strategic importance of the warships, stating, “It’s going to be really important in terms of giving our navy the capability to project, and impactful projection is at the heart of the strategic challenge.”
Stocks in both MHI and Austal increased following the announcement, indicating investor optimism on the long-term value of the deal.
Negotiations and Next Steps
Though the overall structure of the agreement is established, major negotiations over price, sustainment logistics, and the complete production transition to Australia are still ahead. Representatives from both countries are seeking to complete the overall contract by early 2026.
The Mogami-class design of MHI was selected over Germany’s ThyssenKrupp Marine Systems’ MEKO A-200, further demonstrating the trend of strategic defence alliances moving towards Indo-Pacific allies.
Frequently Asked Questions (FAQs)
Why is this agreement between Australia and Japan important?
This agreement is Japan’s biggest arms export since 2014, when it ended its ban on military exports, and is an important step in Indo-Pacific security collaboration. It enhances Australia’s naval power and demonstrates the strategic interest of both nations to push back against China’s increasing influence.
What are the capabilities of the Mogami-class frigates?
The improved Mogami-class frigates are multi-purpose, capable of anti-submarine warfare, air defence, and surface warfare. They have a range of 10,000 nautical miles and can be operated with a crew of only 90, making them very efficient and long-range.
When will Australia get the first warships?
Australia will take delivery of the first Japanese-built frigate in 2029. The other eight ships will be built locally in Western Australia.
Why did Japan secure the contract ahead of other bidders?
Japan’s MHI edged out Germany’s ThyssenKrupp because of the Mogami-class’s cutting-edge capabilities, automation, long-range operating ability, and strategic advantage of stronger defence cooperation between Japan and Australia.
How will this agreement impact the wider Indo-Pacific region?
The pact further deepens trilateral defence cooperation between Australia, Japan, and the U.S., bolsters deterrence in the Indo-Pacific, and promotes the security of trade routes at sea, which are becoming more contested because of China’s activities in the region.
