Japan's Kawasaki Heavy Industries is in talks to co-develop new engines for Germany's Taurus cruise missiles, two sources familiar with the matter said, another potentially significant step in Tokyo's retreat from decades of pacifism.

The Japanese contractor signed a memorandum of understanding on the project on the sidelines of a defence show in Tokyo in May, said the sources, speaking on condition of anonymity due to the sensitivity of the issue. Kawasaki declined to comment. A spokesperson for European defence company MBDA , which builds the weapon, said it was not able to provide any comment on the matter at this time.

EXCEPTIONS TO ARMS EXPORT RULES The air-launched missiles have been at the centre of a public debate in Germany after Chancellor Friedrich Merz earlier this year said

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