Japanese Prime Minister Shinzo Abe Tuesday declared his determination to pursue peace in Asia, as he strengthened defence ties with Australia and signed an ambitious free-trade agreement.

Abe used an historic address to a joint sitting of Australia's parliament to say that Japan "is now determined to do more to enhance peace in the region and peace in the world".

"It is to put that determination into concrete action that Japan has chosen to strengthen its ties with Australia," said Abe, the first Japanese leader to address parliament.

"Our countries both love peace. We value freedom and democracy and we hold human rights and the rule of law dear," he added, calling the relationship "special". 

Prime Minister Tony Abbott described Japan as "a very, very close friend".

"Japan and Australia have so much in common and I am sure that our relationship will go from strength to strength as a result of this visit, and as a result of the annual leaders' meetings that will henceforth take place," Abbott said.

The two leaders inked an agreement allowing for the transfer of Japanese defence equipment and technology to Australia, just days after Tokyo declared its powerful military had the right to fight in defence of allies.

The declaration irked China, Australia's largest trading partner, which has a fractious relationship with Japan including tensions over disputed islands in the East China Sea.

Abe said his country's push to "change its legal basis for security" was so it could work with other nations and "build an international order that upholds the rule of law".

"Our desire is to make Japan a country that is all the more willing to contribute to peace in the region and beyond," he said in his address, which was delivered in English.

"It is for this reason that Japan has raised the banner of proactive contribution to peace."

Abe at a press conference played down recent tensions with China, saying his door was always open for dialogue.

"The door to China is open from the Japanese side and we hope that the Chinese side take the same posture," he said.

He added that the "fundamental position of Japan is that we want to improve our relationship with China".

Abbott echoed Abe's emphasis on the push for peace in the Asia-Pacific as he welcomed Tokyo's decision to be "a more capable strategic partner in our region".

"Ours is not a partnership against anyone; it's a partnership for peace, for prosperity and for the rule of law," he said, offering China reassurance.

"Our objective is engagement. We both welcome the greater trust and openness in our region that's exemplified by China's participation in this year's RIMPAC (Rim of the Pacific) naval exercises."

Abbott hailed Abe as "making his mark on history" as they rubber-stamped a free-trade agreement -- the Japan-Australia Economic Partnership Agreement.

The deal, which was agreed during a trip by Abbott in April to Tokyo, is Japan's first with a major economy.

It will see tariffs cut for Japanese exports of electronics, white goods and cars, while Australia's exports of beef, dairy, wine, horticulture and gain products will gain increased access.

The Australian leader said the agreement showed the two nations were serious about boosting economic growth.

"This is the message that both Japan and Australia will bring to the G20 leaders' meeting in Brisbane in November -- freer trade means more economic growth and more economic growth means more prosperous people and fairer societies," Abbott said.

The sensitive issue of whaling was only briefly raised, with Abbott and Abe saying their differences over an annual hunting programme would not detract from their closer friendship.

New Zealand and Australia hauled Japan before the International Court of Justice over its "scientific" whaling programme in Antarctic waters, which led to a ruling in April that it was a commercial venture.

Abe will travel to Australia's resources-rich state of Western Australia on Wednesday, where he is set to visit its capital Perth as well as Rio Tinto's West Angeles mine in the Pilbara region.

He departs for Papua New Guinea on Thursday.(AFP)