The defence ministry has demanded 3 billion yen ($372 million) over the next four years to develop the aircraft, which would come into operation in 2020, the Yomiuri Shimbun reported without citing sources.
The development of the drone, which will be equipped with an infrared sensor to seek out low-altitude missiles, comes after Japan failed to detect North Korea’s failed rocket launch in April.
The launch, described by Pyongyang as an attempt go put a satellite into orbit but condemned by world leaders as a disguised ballistic missile test, saw the rocket disintegrate over the Yellow Sea just two minutes after launch.
But Japan was forced to rely on information from the United States and media reports after its own detection systems failed.
Japanese officials later said its alert system could not detect the rocket because of its low-altitude flight path.
Japan is also embroiled in a tense territorial dispute with China over a group of islands known as the Senkakus in Japan and Diaoyus in China.
Chinese vessels have moved in and out of what Japan says is its sovereign territory over the last two months, with six Chinese government ships sailing into the Japanese-controlled waters Friday, according to the Japanese coastguard.
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