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The move could concern Washington as Japan is a major customer of US defense equipment, the Tokyo Shimbun said.
Japan is moving ahead because the US military has been reluctant to sell Japan F-22 Raptors, the latest US Air Force jets built to evade radar detection at supersonic speeds.
Japan has been officially pacifist since its defeat in World War II but has one of the world's largest defence budgets and has gradually been expanding its military role.
Previous media reports have said the ministry will include funds to develop the manned prototype in its budgetary request in 2008.
US law prohibits export of Raptors. But the United States flew Raptors to Japan earlier this year on their first foreign flight, showing its commitment to the two countries' security alliance amid tensions with North Korea.
A defence ministry official has previously said Japan was looking at six models of aircraft including the Raptor, the Eurofighter, designed by a European consortium, and the F-35, built by the United States and Britain.
The Japanese government has not supported development of a domestic fighter aircraft since the F-1 support fighter jet in the 1970s.
F-15 fighter jets, which form the core of Japan's fighter force, are being manufactured here under a licence agreement with the United States.
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