This year will be one that severely tests Japan's diplomatic mettle, Prime Minister Fumio Kishida said in a policy speech on Monday (Jan 17), in a nod to the delicate balancing act he faces between the United States and China.

Mr Kishida's speech at the start of the ordinary Diet session comes ahead of his talks with US President Joe Biden on Friday in a virtual summit where China and North Korea are likely to be high on the agenda.

"Japan's diplomacy must be based on 'realism for a new era'," he said during the 40-minute address, citing the need to emphasise values such as human rights and the rule of law, while proactively addressing global challenges such as climate change and healthcare, and protecting Japan's national interests.

"We will assert what we should assert and urge China to act responsibly," he said. "But at the same time, we will hold dialogue and cooperate on common issues, and aim to build a constructive and stable relationship."

This year marks the 50th anniversary of the normalisation of diplomatic ties between Asia's two largest economic superpowers.

Yet, the milestone is overshadowed by mounting fears in Japan over an assertive China, and the prospect of a Taiwan contingency where Japan's south-western island chain is likely to be the main battle theatre.

Mr Kishida said the country will continue to fortify its defences on the islands, known as Nansei in Japanese, which stretch about 1,200km south-west from Cape Sata - the southernmost tip of the mainland - to Yonaguni, which is just 110km from Taiwan.

He also condemned North Korea's repeated missile launches and marked improvement in technology. Monday's launch was Pyongyang's fourth one this year, in an unusually rapid sequence of tests.

Mr Kishida vowed to look at all options, including the so-called pre-emptive strike capability on enemy bases in case of an imminent threat.

The bulk of his speech was, however, domestic as he sought to allay fears over Covid-19 and tepid growth, with an eye on an Upper House election in July.