The defence ministry wishes to create a "coastal security surveillance team" with the main mission to radar-monitor Chinese naval activities, the Yomiuri Shimbun said, citing ministry sources.

Japanese defence officials are considering placing about 200 troops on Yonaguni, Japan's westernmost island, roughly 100 kilometres (60 miles) east of Taiwan, the Yomiuri said.

The Japanese military regularly sends patrol aircraft to the region but has no permanent monitoring facility there, the Yomiuri said.

A defence ministry official denied the report, saying no such decision has been made.

Increased Chinese naval activity has sparked a defence rethink in which Japan has mulled sending more forces to its scattered southern islands and away from Cold War-era locations in the north near Russia.

In an incident in April this year, a large Chinese flotilla ventured near a group of disputed Japanese islands in the East China Sea and sent out a helicopter that buzzed Japanese navy ships monitoring their movement.

The area is a frequent flashpoint for troubles between Japan and China.

Ties have been badly strained since Japan arrested a Chinese trawler captain near the disputed island chain in September, sparking a barrage of protests from China.

Beijing's increased assertiveness, particularly in the South China Sea, has also caused jitters among other neighbouring nations as well as the United States, which is also at odds with China over trade and currency issues.

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