The 5.26 trillion yen (USD 48 billion) request for the fiscal year beginning next April is a 2.5 per cent increase from the current year. A big chunk of the request announced Thursday will cover purchases of upgraded missile interceptors with expanded range, altitude and accuracy.
They include the ship-to-air SM-3 Block IIA jointly developed by the US and Japan and the surface-to-air PAC-3 MSE.
The request comes amid growing fear about North Korea's missile threat and rising tensions between the US and North Korea.
Prime Minister Shinzo Abe called Tuesday's missile firing an "unprecedented, grave and serious threat." On Wednesday, Defence Minister Itsunori Onodera, an advocate of bolstering Japan's missile and strike-back capability, said Tokyo must quickly upgrade its missile arsenal.
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China, which is seen by Tokyo as another security concern, questioned Japan's intentions.
"We think Japan is obliged to explain its real intention to the international community," Hua Chunying, China's foreign ministry spokeswoman, told a regular news conference.
"North Korea has demonstrated its capability to hit targets anywhere in Japan including Tokyo and Okinawa," says Narushige Michishita, a national security expert at the National Graduate Institute for Policy Studies.
Japan currently has a two-step missile defence system interceptors on destroyers in the Sea of Japan, and if they fail, surface-to-air PAC-3s.
Technically, the current setup can deal with falling debris or missiles fired at Japan, experts say, but it's not good enough for high-attitude missiles or multiple attacks.
To diversify and multiply its missile interceptors, the ministry is also seeking to add the land-based fixed Aegis Ashore missile-defence system, while considering an option of the mobile and more costly Terminal High-Altitude Area Defence, or THAAD. Ministry officials said they will decide later this year.