Japan will get the chance to pursue an unprecedented military export deal when its defense and foreign ministers meet their Australian counterparts in Tokyo next month.
Japan is considering selling submarine technology to Australia - perhaps even a fleet of fully engineered, stealthy vessels, according to Japanese officials. Sources on both sides say the discussions so far have encouraged a willingness to speed up talks.
Any agreement would take months to negotiate and remains far from certain, but even a deal for Japan to supply technology would likely run to billions of dollars and represent a major portion of Australia's overall $37 billion submarine program.
It would also be bound to turn heads in China.
Experts say a Japan-Australia deal would send a signal to Asia's emerging superpower of Japan's willingness, under nationalist Prime Minister Shinzo Abe, to export arms to a region wary of China's growing naval strength, especially its pursuit of territorial claims in the East and South China seas.
A deal would also help connect Japanese arms-makers like Mitsubishi Heavy Industries and Kawasaki Heavy Industries to the world market for big, sophisticated weaponry, a goal Abe sees as consistent with Japanese security.
Abe has eased decades-old restrictions on Japan's military exports and is looking to give its military a freer hand in conflicts by changing the interpretation of a pacifist constitution that dates back to Japan's defeat in World War Two.
"There's a clear danger that aligning ourselves closely with Japan on a technology as sensitive as submarine technology would be read in China as a significant tightening in what they fear is a drift towards a Japan-Australia alliance," said Hugh White, a professor of strategic studies at the Australian National University. "It would be a gamble by Australia on where Japan is going to be 30 years from now."