Japan remains fully committed to building a linchpin multibillion-dollar missile interceptor with the United States, the head of the U.S. Missile Defense Agency told Congress, even as U.S.-Japanese ties adjust to a new era.

Army Lieutenant General Patrick O’Reilly said on Wednesday he had held several high-level program reviews with Japanese government officials since the Democratic Party of Japan’s victory in the Aug. 30, 2009, elections for the legislature’s lower house.

“They have indicated that they are in full support and their commitments are solid,” he told the Senate Appropriations Defense subcommittee, referring to a Standard Missile-3 upgrade program in its fifth year of development.

Published reports from Japan have said the coalition government of Prime Minister Yukio Hatoyama that took power in September plans to reduce overall missile-defense spending.

Japan has spent just over $1 billion to help build a more capable SM-3 version, said Richard Lehner, a Missile Defense Agency spokesman. It is being co-developed with Waltham, Massachusetts-based Raytheon Co, the world’s biggest missile maker.

The new version, dubbed SM-3 Block IIA, is key to U.S. plans to be able to defend all of NATO’s European territory from a perceived Iranian ballistic-missile threat as soon as about 2018.

It is designed to improve the antimissile’s velocity, range and ability to discriminate among a missile target and decoys and would be deployed on land as well as at sea. A follow-on version, called Block IIB, with yet higher velocity, is planned to help protect the U.S. East Coast starting in about 2020 from potential long-range Iranian missiles.

O’Reilly said the United States and the Hatoyama government had identified all steps necessary to successfully integrate the upgraded Block IIA SM-3 interceptor.

Its first flight test should be in 2014 and the first intercept test in 2015, he said.

“Within the next year, we will begin our discussions on production arrangements between the United States and Japan,” O’Reilly added.

Left unmentioned by O’Reilly was potential opposition from pacifist elements in the coalition government to Japan’s export of the interceptor to countries other than the United States.

Poland and Rumania have agreed in principle to host land-based SM-3 interceptor sites. These are known as “Aegis ashore” units after a Lockheed Martin Corp mobile defense system initially used only at sea.

Responding to Sen. Richard Shelby, an Alabama Republican, O’Reilly said contractors could compete for “Aegis ashore” work after the projected Rumanian installation that he described as on a tight deadline.

“We are reviewing over $37 billion in new contracts for competition over the next two years,” O’Reilly said in an opening statement, referring to the range of missile-shield work.

By 2015, the Obama administration plans to buy 436 early-generation SM-3 interceptors and 431 Lockheed-built Terminal High Altitude Area Defense systems, the building blocks of regional antimissile shields. It also plans to have 38 ballistic-missile-defense ships available.

Since the Democratic Party of Japan’s victory, bilateral tensions have risen over the desire of some Hatoyama government members to change a 2006 U.S.-Japan deal to relocate a controversial U.S. Marine air station, Futenma, to a less densely populated spot on Okinawa.

Japan has acquired from the United States a layered shield against ballistic missiles that could be fired by North Korea and tipped with chemical, biological or nuclear warheads.

The SM-3 co-development program represents “not only an area of significant technical cooperation, but also the basis for enhanced operational cooperation to strengthen regional security,” Bradley Roberts, a deputy assistant secretary of defense, told a House of Representatives Armed Services subcommittee on April 15.

(Reporting by Jim Wolf; editing by Gerald E. McCormick and Andre Grenon)