Japan cleared the way for a law allowing non-aggressive military use of space on Friday, overturning a decades-old policy of limiting space development to peaceful uses.
The move comes during a visit by Chinese President Hu Jintao aimed at warming long-fraught bilateral ties.
A lower house committee approved the bill, which is to be submitted to a full session of parliament in the next few weeks, a ruling Liberal Democratic Party lawmaker's secretary said.
China alarmed the world in January 2007 by using a missile to shoot down one of its own disused satellites, demonstrating its burgeoning prowess in space and military hardware.
Pacifist Japan's space scientists complain that separation of space development from the military under a policy maintained since 1969 is one reason why its own technological progress has been slower.
Tokyo's spy satellites
Unlike China, Japan has never attempted a manned space flight. Tokyo's spy satellites, launched to keep an eye on neighboring North Korea and controlled by a government department, provide far poorer resolution than other governments' military satellites.
The new law would allow Japan's military to launch its own surveillance satellites and an early-warning satellite as part of the missile defense system it is building in cooperation with its top ally the United States, the Asahi newspaper said on Friday.
Japan's ruling coalition and main opposition parties have agreed on a bill to be presented to parliament before the end of the current session on June 15. With the backing of the main opposition Democratic Party as well as the ruling Liberal Democratic Party and its smaller ally Komeito, it is certain to pass.
Earlier Democratic Party concerns about the bill were allayed by adding a reference to Japan's pacifist constitution, the Asahi said.