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International relations

Japan stuck with $1.6bn bill after scrapping Aegis Ashore system

Tokyo seeks to renegotiate contracts with Washington

A U.S. Navy ship equipped with the Aegis system fires an interceptor. Japan has Aegis vessels as well, but had decided to adopt the land-based Aegis Ashore due to lower costs. (Photo courtesy of the U.S. Missile Defense Agency)

TOKYO -- As Japan prepares to officially halt deployment of the Aegis Ashore missile defense system, it faces the question of what to do about previously signed contracts with the U.S. worth 70% of its estimated total procurement costs.

Defense budgets through fiscal 2019 included 173.2 billion yen ($1.6 billion) in related contracts. Japan has signed a $320 million-plus contract with Lockheed Martin for radar systems, while the physical installations are being purchased through the U.S. government.

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