China's accelerated rise to power, and the United States' recent economic challenges have given Japan and other Asia-Pacific allies reason to seek balancing alliances or to strengthen military defenses and power projection capabilities. Paralleling Japan's need to increase homeland defense is a need to strengthen and adjust the United States-Japan Security Agreement. In an effort to reduce the deficit, the United States is relocating and consolidating forward deployed forces within the Asia-Pacific region. Changes to this forward presence and increased tensions in the region have prompted Japan to pursue increased conventional capabilities. The traditional, long-standing threat of North Korea, maritime territorial disputes with China, and perception of U.S. inability to provide long-term security in the region have created a situation that is counter to U.S. national interests. The current global economic climate and China's military growth may necessitate a review of U.S. policy and defense strategy to support expansion in Japanese military capability to address 21st century regional threats.