Chief of US Pacific Command Admiral Harry Harris said, "I think it is going to be held in the northern part of the Philippine Sea. I think including another high-end military power like Japan in Malabar increases the complexities and allows India and US to work with Japanese."
Speaking at a seminar here, he added that the exercise is an important element for assessing the maritime capabilities of all the three countries.
Harris said everyone has a vested interest in ensuring the region remains secure, stable and prosperous.
"How Indo-Asia-Pacific nations employ naval forces to support these economic interests matters greatly," he said.
Reacting sharply to India's move in December last year of including Japan in the Indo-US Malabar naval exercises on a permanent basis, China had said it is hopeful Tokyo will not "provoke confrontation" and "heighten tensions" in the region.
China is in a territorial dispute with Philippines, Malaysia, Brunei and Vietnam over the South China Sea. There are overlapping claims over the waters.