Abstract: Japan banks heavily on her security alliance with the United States (US) to ensure availability of requisite military capability in the region. China’s economic and military capabilities have grown in the last two decades, closing the gap with the US. With diminishing differential, especially with respect to China, the US’ deterrence power has gradually declined. Under these conditions, Japan has to develop Self-Defense Forces (SDF) capabilities to ensure that it, in combination with its alliance partner, the US, is able to meet national security challenges. In a major shift in security policy, on 9 January 2007 Japan’s Parliament approved the upgradation of Defense Agency/SDF to a full-fledged ministry. However, the changes in the SDF, especially in its doctrine and roles, have been gradual. Till SDF graduates to have an offensive capability that can deter capably, the US will continue to be a key player in Japan’s security milieu.