Britain and Japan are close to merging their next-generation Tempest and F-X fighter jet programmes, with a deal on a new joint project expected by year's end.
Japan is seeking a non-US partner for a large military programme for the first time, with Tokyo and London collaborating on something bigger than expected five years ago.
Reports indicate Japan is in discussions with BAE Systems PLC (LSE:BA.) to develop the country's sixth-generation F-X fighter airplane.
In accordance with the terms of a memorandum of collaboration signed in December 2021, the UK and Japanese governments are to "continue discussions around potential future fighter subsystem collaboration throughout 2022".
Britain could handle exports to Europe, while Japan would be responsible for Asian markets, reports said, adding collaboration would spread development costs, while exporting would increase production lots and reduce prices per plane, allowing each country to stretch its defence budgets.
BAE is said to be in talks with Japanese companies, including Mitsubishi Heavy Industries (MHI), about developing these subsystems.
MHI is the main Japanese contractor for the F-X project, which aims to replace by 2035 the F-2 fighter aircraft MHI currently operates.
In a May 5 meeting at 10 Downing Street, Japanese Prime Minister Fumio Kishida and UK Prime Minister Boris Johnson decided to finalise the joint UK-Japan cooperation on the project by December 2022.
A statement issued by the UK government on May 5 stated that both leaders agreed that "UK and Japan were making significant progress" on the UK's Future Combat Air System (FCAS) and that the initiative could become a cornerstone of bilateral relations between the two countries.
In addition to subsystems, BAE could well participate in the project in a more expansive way.
In August 2020, Tokyo issued a request for information (RFI) to select foreign partners for the F-X development phase, which expected companies to demonstrate "technical readiness level" in capabilities such as fixed-wing aircraft, radars, electronic warfare equipment, sensors, and datalink equipment.