The unsuccessful launch Saturday of two spy satellites to monitor North Korea also dealt a severe blow to Tokyo's space defence programme, meant as a response to Pyongyang's military threat, they said.
A Japanese H-2A rocket with two spy satellites on board appeared to have lifted off smoothly from a launch site on the southern island of Tanegashima some 1,000 kilometres (620 miles) southwest of Tokyo.
But the space center decided to destroy the rocket and the satellites about 10 minutes after take-off after one of the two rocket boosters failed to separate from the fuselage in the second phase of the flight.
"With the failure, international trust in Japan's space technology has been damaged considerably," Hideo Nagasu, former chief of Japan Aerospace Exploration Agency, told AFP.
"The failure is seen in sharp contrast to China's remarkable success," Nagasu said of Beijing's launch into orbit last month of a Chinese astronaut, who circled the Earth 14 times during a 21-hour flight.
China, the world's newest space power, said last week it planned to send a spacecraft into orbit around the moon by 2007, while it is set to launch the first satellite in its "Double Star" project before the end of the year.
Japan's failure came after five consecutive successful rocket launches, which followed two straight failures in 1998 and 1999.
Experts forecast Japan will be forced to delay the planned launch of another H-2A rocket in February which was to carry a satellite to be used for weather observation.
The failure also means a major setback in Japan's plans to set up a satellite defence scheme after the successful launch in March of its first spy satellites, analysts said.
"It was a severe blow to its plan to begin satellite intelligence activities," said Hideshi Takesada, professor at National Institute for Defence Studies.
"Operating only two satellites is insufficient as we need 16 satellites ideally," Takesada told AFP.
"And North Korea's missile threat remains unchanged," said Takesada. "Japan really needs to rush to look into the failure, fully review the programme and relaunch more satellites as quickly as possible."
The satellite project, worth 250 billion yen (2.3 billion dollars), was intended as a response to North Korea's firing of a suspected Taepodong ballistic missile over Japan into the Pacific Ocean in August 1998 -- a move that sent shockwaves around the region.
The weekend's failed launch came at a sensitive time for Japan and North Korea as the two countries prepare to sit down at six-way talks to resolve the crisis over Pyongyang's nuclear ambitions.
North Korea denounced the deployment of the first two satellites as a "hostile act" which could trigger a renewed arms race.
"The failure is expected to have little impact on the upcoming six-way talks as North Korea still considers Japan's abilities in satellite defence to be low," said Hajime Izumi, professor of Shizuoka Prefectural University.
"I believe the North's missile threat is not imminent, but we have to be on alert when North Korea obtains technology to produce a nuclear warhead. That would be a real crisis," he told AFP.
Despite being under the US security umbrella since the end of World War II, Japan awoke to the need for self-defence following a series of missile tests by North Korea.
"It was extremely regrettable as we have needed to strengthen our ability to collect intelligence," Prime Minister Junichiro Koizumi said Saturday. "We will consider our future action while pursuing an investigation into the cause immediately, strictly and thoroughly."