In this paper, we apply business cycle accounting, introduced by Chari et al. (2007, Econometrica 75 (3), 781-836), to the Japanese economy in the period during 1901-1910, during which Japan experienced the outbreak of the Russo-Japanese War, 1904-1905. Business cycle accounting divides factors that affect the economic variables (real GNP, consumption, investment, and labor supply) into four wedges: efficiency, labor, investment, and government consumption wedges. These wedges exactly replicate allocation in the economy. We find that the efficiency wedges can explain the most of Japanese economy. This is consistent with the previous studies conducting the analysies on other countries and periods. In addition, we find that real GNP would be lower without the government consumption wedges, implying the importance of military expenditure in the war period.