TOKYO: Japanese defence forces will participate for the first time in military exercises in Indonesia next month alongside the United States and Australia, Japanese Prime Minister Fumio Kishida said on Wednesday after talks with Indonesian President Joko Widodo.

The two leaders also agreed to cooperate more closely on energy during their second meeting this year following one in late April, with Kishida saying Indonesia was a "key strategic partner for Japan".

Japan's Self-Defence Forces would take part in the Garuda Shield joint military exercises to be held in Indonesia from Aug. 1 with the United States, Australia and others, he added.

The annual exercises, typically between Indonesia and the United States, will be "significantly larger in scope and scale" than previous years, the United States has said.

Japan's involvement comes as Washington and its regional allies step up efforts to counter China's growing might in the Indo-Pacific region.

Japan also would loan the Indonesian government 43.6 billion yen ($318 million) for infrastructure projects and disaster prevention, Kishida said.

Indonesia was Japan's 14th largest export market in 2020, at $9.2 billion, according to IMF data compiled by Refinitiv. Indonesian imports into Japan totalled $14.5 billion that year, making it Japan's 12th largest source of imports.

The Indonesian president visited China on Tuesday for talks with President Xi Jinping and Premier Li Keqiang in Beijing. The leaders pledged to scale up trade and expand cooperation in areas such as agriculture and food security. 

Jokowi will meet Emperor Naruhito later on Wednesday.