Japan and the US have signed a deal to increase co-operation on their ballistic missile defence systems.
Japan relies on the US for protection from North Korea
It comes a week after Japan revised its defence policy to ease some of its self-imposed restrictions on military activity, including an arms export ban.
Japan and the US began joint research into a next-generation missile defence system shortly after North Korea flew a missile over Japan in 1998.
The Japanese government has also identified China as a future threat.
"Developing a missile defence is tough work, but my friend it is a noble challenge," US Ambassador Howard Baker told Japanese Defence Minister Yoshinori Ono after they had signed the memorandum of understanding.
Mr Ono told the news conference: "After joint research, we will move on to joint production.
"This is the demand of the time."
Last week's decision to relax Japan's ban on arms exports will mean it is now easier for Tokyo to co-operate on technical development with the US of its proposed missile defence shield, also known as "son of star wars".
However, the Pentagon said on Wednesday that the first test of the planned multi-billion dollar anti-missile shield in nearly two years had failed, with an interceptor missile failing to launch.
In addition to researching a new missile defence system with Washington, Japan last year bought its own missile defence system worth 700bn yen ($6.5bn) which is set to be fully operational in 2011.
Japan and the US' defence commitments are designed to address concerns about North Korea, which possesses missiles that can reach Japan, and about China's military build-up.
But there are fears among some arms control experts that the development of defensive systems could spur those same countries to bolster their offensive capabilities.