If Japan really is a pacifist nation that has forever renounced war, why is it ranked eighth in the world in terms of military expenditures?

If you want peace you must prepare for war.

The Japanese face legitimate threats from the Koreans and Chinese which are both fairly belligerent military powers and historical enemies. It's not 1945 anymore and the US is trying to dial back being the free security for Japan and Europe.
Just possessing plutonium is not much of a nuclear weapons program.