The US ambassador to Japan on Tuesday urged the pacifist nation to boost its defence spending in response to a military build-up in the region.

"I think the Japanese are getting a bargain in the (US-Japan) alliance on what we bring on the table," ambassador Thomas Schieffer told reporters.

"Our capabilities have increased dramatically because we are spending more on defence than we were 10 years ago," he said.

"That helps Japan. I don't think it is unfair of us to suggest that Japan needs to look at that and make an assessment. A hard choice, perhaps, but Japan needs to spend more on defence," he added.

The United States has a security treaty under which it protects Japan, which has been officially pacifist since its defeat in World War II.

Japan's defence spending is currently limited to the equivalent of one percent of its gross domestic product (GDP) while its Asian neighbours are increasing their military budgets, Schieffer noted.

China's military spending has grown on average 14.2 percent a year over the past decade while South Korea's defence budget has increased by a total of 73 percent in the same period, he said.

"A lot of people in this neighbourhood are spending a lot more money on defence and yet the Japanese are not," Schieffer said.

Japan has recently sought to beef up its defence by buying high-tech military equipment including six Aegis destroyers fitted with anti-missile capabilities.

It is also seeking to buy an F-22 stealth fighter, but is waiting approval from the US Congress.

"But (Japan) cannot get the value for the yen that it spends if it doesn't reform its procurement practices," Schieffer said, urging greater transparency and competitiveness in awarding defence contracts.

He said that the use of multi-year military contracts and increased military cooperation with the United States would help Japan to reduce procurement costs.