Why Japan is Australia’s Indispensable Indo-Pacific Partner
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Max Martin |Australian Foreign Policy Fellow
Since the end of the Second World War, Australia and Japan have transformed their relationship from one defined by wartime memory into a close strategic partnership. Long anchored in trade, investment and shared reliance on the United States (US), the relationship is now shaped by common concerns over China’s assertiveness and uncertainty about Washington’s reliability. As an increasingly sporadic and ‘America First’ US administration raises doubts about American leadership, Japan has become indispensable to Australia’s regional security strategy.
The election of Sanae Takaichi as Japan’s Prime Minister (PM) in October 2025 renewed discussion for an alteration of Japan’s defence policies. Amid the approval of a record defence budget and an ever-loosening definition of the Self-Defence Force, Japan is reemerging as a regional military power. China has been attempting to characterise Japan’s remilitarisation as a reversion to their imperial past. However, PM Takaichi’s respectful regional diplomacy, including laying a wreath at the Tomb of the Unknown Soldier at the Australian War Memorial, has been successful in reassuring its Indo-Pacific partners.
Takaichi’s recent visit to Canberra has helped underline that Japan is Australia’s most important partner behind the US. This is reflected in a shared strategic outlook, expanding defence cooperation, a growing economic security partnership, and potential for future collaboration on emerging technology and submarines.
Strategic Convergence
In a world where interests are diverging and alliances are fracturing; Japan and Australia’s near perfect strategic alignment is a rarity. Both nations are treaty allies with the US and still heavily reliant on US military technology and force projection for security and deterrence in their backyards. Quad membership and shared partnerships across Southeast Asia and the Pacific reflect a common commitment to promoting a free and open Indo-Pacific. Both countries also face a more assertive China, with each having experienced Beijing’s economic and military coercion firsthand.
This shared security outlook has formed a strong basis for partnership. This has been built on by Australia’s purchase of Japan’s Mogami-class frigates to replace the ANZAC-class. The deal represents a major capability upgrade for the Royal Australian Navy, delivering larger, more heavily armed ships with a greater range and endurance. It also allows Australia to draw on Japan’s status as a world-class shipbuilder, deepening defence-industrial cooperation in the maritime domain, upon which both Australia and Japan are heavily reliant. When combined with the Reciprocal Access Agreement, which streamlines the deployment of each country’s forces into the other’s territory, a shared strategic vision is becoming operationalised. Japan’s defence-industrial capacity and Australia’s operational experience are increasingly reinforcing one another, creating the basis for a more credible deterrent against Chinese coercion in Indo-Pacific.
Building Economic Security
The importance of Australia-Japan cooperation extends beyond defence. Japan is a recognised leader in economic security, stemming from China’s weaponisation of rare earth exports to Japan in 2010. This moment of extreme vulnerability, and a lack of natural resources, pushed Tokyo to insulate its supply chains from future shocks. As trade becomes more strategic, Australia and Japan have strong economic compatibility. Japan’s position as a producer of high-tech technology, combined with Australia’s abundance of natural resources, including critical minerals, has led to the announcement of the Australia-Japan Joint Declaration on Economic Security Cooperation.
The declaration formalises a pattern of economic security cooperation that was already taking shape. Japan’s investment in Lynas Rare Earths, an Australian mining company, is a clear example. In an attempt to ‘de-Chinafy’ its supply chains, Japan has extended its agreement with Lynas until 2038, whereby Lynas will provide a secure supply of rare earths with a minimum price guarantee. Takaichi’s recent visit also shored up energy cooperation, with both country’s sharing a mutual energy dependence. With Australia supplying almost half of Japan’s liquefied natural gas and Japan being one of Australia's biggest refined gasoline and diesel providers, institutionalising economic security assurances is a prudent strategy.
The Next Frontier of Cooperation
The strong foundations of the existing relationship provide a springboard for cooperation on more complex initiatives, including Artificial Intelligence (AI) and submarines. Frontier AI models are currently dominated by the US and China. Although Australia is a close US ally, the secrecy surrounding Anthropic’s Mythos model shows that friendship doesn’t necessarily equate to access. Thus, Australia should be on the inside of AI development if it wants to maintain a competitive edge in the AI race. A partnership with Japan would keep Australia from falling behind. Japan is investing heavily in AI, with the government setting up an AI Strategic Headquarters and a consortium of Japan’s biggest companies developing a frontier model. Existing critical minerals cooperation and Australia’s strong potential to be a data center hub, due to an abundance of land and clean energy resources, means that each country’s strengths are highly complementary.
Submarines are another area where closer cooperation could prove valuable. If delays to AUKUS create a capability gap between the retirement of the Collins-class fleet and the arrival of Australia’s nuclear-powered submarines, leasing Japanese submarines could offer a practical stopgap. Japan’s modern and highly capable submarine fleet, combined with its strong defence-industrial base, makes it a particularly attractive partner for mitigating this risk.
These opportunities show that the Australia-Japan partnership has potential to expand beyond existing defence and economic security arrangements. As Japan continues to redefine itself, Australia should continue to showcase its strengths as a partner, so that one day the two countries can be more than just “quasi-allies.”
Max is completing his Master of Arts in International Relations at the Johns Hopkins School of Advanced International Studies (SAIS), where he is a Ramsay Postgraduate Scholar. He spent his first year at SAIS Europe in Bologna before moving to the Washington, DC campus for his final year.
Originally from Perth, he graduated from the University of Western Australia with a Bachelor of Commerce in Economics and Finance. A semester abroad at the Vrije Universiteit Amsterdam strengthened his interest in international affairs and motivated further study.
Max recently interned at the Australian Embassy in Bangkok, gaining experience in the politicaland economic sections at one of Australia’s largest overseas posts. His academic interests focus on the intersection of economics and strategy and how states respond to an evolving global landscape.
Through this Fellowship, he hopes to contribute to public debate on Australia’s foreign policy priorities, challenges, and long-term strategic choices.
Disclaimer: The views and opinions expressed in this article are those of the author, and do not necessarily reflect the views and opinions of Young Australians in International Affairs. All content is original, and no plagiarism has been used in the preparation of this article. No AI tools were used by this author in the preparation of the article.