Japan last year eased its self-imposed ban on arms exports, in a step to create new markets for its defence contractors and facilitate cross-border cooperation in development of military equipment and technology.

CHANGING SECURITY ENVIRONMENT

Following a sweeping update of its national defence policy in 2010, Japan is bolstering its defence posture to its southwest, where it shares a maritime border with China.

China is rapidly building up its military might and increasing naval activities in Asian waters including the East China Sea, where Beijing and Tokyo have conflicting claims over uninhabited islets called Senkaku in Japan and Diaoyu in China.

Tensions have heightened since Prime Minister Yoshihiko Noda said this month the government was considering buying the disputed islands from their private owners to prevent Tokyo’s conservative governor and a harsh critic of China proceed with a similar plan.

Japan is also wary of North Korea’s nuclear and missile programs, with its archipelago sitting within the range of Pyongyang’s medium-range Nodong missiles.

In April Japan and the United States agreed to shift 9,000 U.S. Marines from the Japanese island of Okinawa to Guam and other Asia-Pacific sites as part of Washington’s strategic rebalancing, or “pivot”, toward the region.

But in recent months the planned deployment by the Pentagon of the Osprey helicopter-plane hybrid on Okinawa stirred up strong local protests, in the latest snag in U.S.-Japan security ties.

The Osprey can fly faster and further than conventional helicopters, making it easier for U.S. forces to respond to contingencies in areas away from Okinawa, such as Senkaku, but crashes in Morocco and Florida this year fanned safety concerns. ($1 = 78.6300 Japanese yen) ($1 = 6.3807 Chinese yuan)