In Tokyo on Thursday Mr Turnbull praised Japan for its political stability and adherence to the international rules, and highlighted "our burgeoning defence cooperation" and shared values.

"The strategic logic that is driving our countries to work more closely on defence and security is only getting stronger as the regional environment becomes more dangerous and challenging. We are looking to deepen our engagement not reduce it," he said at a business lunch.

Mr Turnbull rode with Japanese Prime Minister Shinzo Abe in a helicopter to the Japanese Ground Self Defence Force Narashino training area, where they inspected a United States Patriot anti missile system and Australian-made Bushmaster military vehicles used by Japan.

On Thursday evening he was expected to attend a special meeting of Japan's National Security Council.

Mr Abe told the NSC meeting: "Japan and Australia form a special and strategic partnership under which we share fundamental values, including freedom, democracy, human rights and the rule of law."

Japanese media has framed a push for a "visiting forces agreement" between Australia and Japan, to allow military training exchanges, as a move to bolster regional security in the face of North Korean aggression and Chinese assertiveness in the South China Sea.

Mr Turnbull's annual meeting with Mr Abe has come as Beijing has been increasingly aggrieved by what it perceives is "anti-China" rhetoric from the Turnbull government.

In a shift in language on Thursday, Mr Turnbull praised the "real progress" China has made in negotiating with ASEAN countries on the South China Sea at last year's East Asia Summit.

"There was more positive movement towards the code of conduct being finalised...I am more optimistic about those issues being resolved," he said.

But the language in a joint statement issued on Thursday evening with Mr Abe was tougher, saying the two leaders remained concerned about the situation in the South China Sea, reiterated the importance of freedom of navigation and urged the "demilitarization" of disputed features.

They did acknowledge progress on a Code of Conduct.

The two leaders would also "remain in close communication about the situation in the East China Sea", where China is in dispute with Japan.

Chinese media is closely watching Mr Turnbull's Japan visit, with The Global Times reporting the Japan-Australia summit seemed to be laying the foundation for a military alliance to contain China.

China Radio quoted Chinese military analysts warning Australia was at a crossroads, and if it formed an " iron triangle" in the region with the US and Japan, it would be a "dangerous step forward" with Australia encouraging Japan's shift from self defence to outbound national defence.

Mr Turnbull said he wanted the Trans Pacific Partnership trade deal signed by March because it was "the most important contribution to the rules based system that is on offer in the world economy".

Australia and Japan had a "joint investment in shaping and sustaining the regional order", he said.

"If there is one thing that unites our two countries it is our commitment to the free flow of goods, capital and ideas within clear and effective rules ... we always respect the umpire."

Canada has wavered on its commitment to the TPP, and Mr Turnbull said it should be signed "by those that are ready to move".

In the joint statement, the two leaders directed their ministers to finalise negotiations on a "visiting forces" deal as early as feasible.

The first bilateral exercise involving fighter jets would be held in Japan in 2018.

The statement committed to enhancing trilateral cooperation with the US to ensure the stability of the Indo-Pacific, and also develop trilateral cooperation with India.

The agreement would allow the two countries to bring military equipment onto each other's soil more easily during exercises.

Japan is Australia's second largest export market after China, Australia's largest liquefied natural gas customer, and the second largest source of foreign direct investment in Australia.