The Japanese government has moved to ringfence ¥1 trillion ($6.7 billion) for space development. The plan was announced days before Asian neighbour North Korea launched a military satellite.
Prime Minister Fumio Kishida's cabinet approved a bill to create the fund, which the Japan Aerospace Exploration Agency (JAXA) would be able to distribute as grants for research and development and start-up funds for new businesses.
The funding was needed to stop Japan falling behind "increasingly intensifying international competition," said Economic Security Minister Sanae Takaichi.
JAXA has previously been limited to offering technical advice to newcomers in the Japanese aerospace sector, as it lacks a budget for investment.
India launched the first ever probe mission to the moon's southern polar region earlier this year.
In the meantime, China is also planning to bring back the first soil samples from the lunar south pole with it's Chang’e-6 mission, while Russia has announced its intention to send a manned mission to the Moon within the next decade.
The Democratic People's Republic of Korea (DPRK) showed off its new Chollima launch rocket this week when it put the Malligyong-1 surveillance satellite in orbit.
The southern, US-backed Republic of Korea responded by suspending parts of the 2018 agreement on de-escalating military tensions — prompting the north to re-start military activities halted under that deal.
Pyongyang has renewed testing of ballistic and cruise missiles in the past year as part of its ongoing programme to develop delivery systems for its nuclear arsenal.
The DPRK became the world's newest nuclear-armed power in October 2006, when it conducted a successful underground test of an atomic bomb. In September 2017 it tested a device with a yield of up to 280 kilotons, assumed to be a thermonuclear weapon, around the time it first flew missiles capable of hitting the US mainland.
The failure of the US, South Korea and others to agree a peace treaty in the Korean War that ending with an armistice in 1953, coupled with Japan's refusal to apologise for atrocities committed in Korea before and during the Second World War, has led to decades of unresolved enmity.