But after the two countries had signed a mutual defense pact in 1951, the U.S. began cautiously to encourage Japanese rearmament, seeking military support against the Soviet Union. Tokyo agreed, but it capped its military spending around 1 percent of Japan’s GDP. This was intended to reassure Japan’s neighbors, who viscerally remembered the country’s wartime expansionism. However, because Japan didn’t spend heavily on arms, it had more funds to invest elsewhere.
