Tokyo has relaxed a decades-old ban on arms exports, allowing Japanese companies to participate in the international development and manufacture of advanced weapon systems.

The long awaited move could have far-reaching implications for Japan’s struggling domestic defence sector and western contractors hoping to share the increasing costs and technical challenges of developing military platforms.

The Keidanren, Japan’s biggest business lobby, hailed the long-debated relaxation as an “epoch making” development. Domestic contractors such as Mitsubishi Heavy Industries and Ishikawajima-Harima Heavy Industries have formidable manufacturing clout and the relaxation could help US and European defence companies access advanced Japanese technologies in areas ranging from materials to software.