Japan and Australia have signed an agreement to cooperate closely on defence in the latest step to bolster security ties against the backdrop of China's rising military and economic might.

Japanese Prime Minister Fumio Kishida and Australian Prime Minister Scott Morrison held a virtual summit to seal a pact that has been in the works for several years.

Australia has been working with Japan, India, the United States and Britain to strengthen defence ties amid concerns about China, including its pressure on Taiwan, freedom of navigation in the region and trade disputes.

The Reciprocal Access Agreement, Japan's first with any country, will allow the Australian and Japanese militaries to work seamlessly with each other on defence and humanitarian operations, Mr Morrison said.

"Japan is our closest partner in Asia as demonstrated by our special strategic partnership, Australia's only such partnership - an equal partnership of shared trust between two great democracies committed to the rule of law, human rights, free trade and a free and open Indo-Pacific," Mr Morrison said at a signing ceremony.

Japan's only other military pact is with the United States, a status of forces agreement dating back to 1960 that allows the US to base warships, fighter jets and thousands o froops in and around Japan as part of an alliance that the US describes as the bedrock of regional security.

"The RAA is a landmark treaty which opens a new chapter for advanced defence and security co-operation of what is a complex and rapidly changing world, something you and I both understand very well," Mr Morrison told Mr Kishida.

Mr Morrison said ahead of the meeting that stronger ties with Japan were needed "to deal with a new and even more challenging environment, particularly within the Indo-Pacific".

Mr Kishida had been due to travel to Australia but scrapped the trip to tackle a surge in Covid-19 cases in Japan.