Japan-U.S. missile defense faces budget limits

By Isabel Reynolds

TOKYO (Reuters) - Tokyo may not have the money to complete its joint missile defense plans with the United States, aimed at protecting it from regional threats such as North Korea, Japan's defense minister said on Wednesday.

"The first half of the missile defense plan is complete, but we are considering what to do about the remaining half," a Japanese official quoted Toshimi Kitazawa as telling U.S. Defense Secretary Robert Gates.

"I understand how important missile defense is, but the financial authorities are taking a harsh view. However, I want to overcome this somehow," the official quoted him as saying.

Japan's new Democratic Party government, which toppled a long-ruling conservative government in an August election, is trying to slash unnecessary spending and control massive national debt without damaging an already weak economy.

The official did not give details of which parts of the plan might be delayed or canceled.

Japan's joint ballistic missile defense program with the United States includes ship-based SM-3interceptors and land-based PAC-3 interceptors, as well as sensors and joint research to upgrade the system.

Some of Japan's PAC-3 missile interceptors were deployed in April, when North Korea conducted what it said was a satellite launch on a flight path over northern Japan.

The Japanese official quoted Gates as saying financial authorities were always strict and adding that the missile defense plan was a wonderful example of success in the U.S-Japan alliance.

Japan's defense budget has been falling for seven straight years, reaching about 4.7 trillion yen ($51.9 billion) in the year that ended in March and is set for further cutbacks, domestic media say.

The defense ministry has allocated between 100 billion yen and 180 billion yen ($1.10-1.99 billion) a year to the joint missile defense project annually since 2004.

($1=90.65 Yen)

(Reporting by Isabel Reynolds; Editing by Bill Tarrant)