Japan plans to create an arms procurement agency to streamline Tokyo's spending on defense-related hardware that will also promote military exports and take charge of advanced weapons research, said two people with knowledge of the developing plan.

One immediate aim of the new agency would be to lower the outsized costs of buying equipment for Japan's military.

"The goal is to cut costs. It is being created to improve how we buy things," said Akira Sato, a ruling Liberal Democratic Party lawmaker involved in formulating defense policy as parliamentary secretary of defense.