Japan's navy marked its 60th anniversary with a major exercise intended to show off its maritime strength. The display comes amid a tense territorial dispute with China.

About 40 ships — including state-of-the-art destroyers, hovercraft able to launch assaults on rough coastlines and new conventionally powered submarines — took part in Fleet Review 2012, the maritime equivalent of a military parade. About 30 naval aircraft, mostly helicopters, also participated Sunday.

Japan's navy was joined by warships from the United States, Singapore and Australia. Representatives from more than 20 countries, including China, also attended the event staged in waters south of Tokyo.

Prime Minister Yoshihiko Noda, who watched aboard the destroyer JS Kurama, said Japan faces "severe" challenges to its security, though he did not specifically mention the dispute with Beijing over islands in the East China Sea.

Noda called on the sailors taking part in the exercise, which is held every three years but was expanded this year because of the 60th anniversary, to be prepared to face "new responsibilities" as the security situation around the country changes.

Japan's navy — formally called the Maritime Self-Defense Force — is among the best-equipped and best-trained in the world. As part of a post-World War II mutual defense pact, Japan also hosts the U.S. 7th Fleet, which includes the USS George Washington aircraft carrier battle group.

But Tokyo has been alarmed in recent years by the rise of neighboring China's naval forces, which some strategists say could upset the regional status quo and erode Japan's ability to credibly deter challenges to the freedom of key sea lanes.

Concerns over a growing assertiveness in China's foreign policy, meanwhile, have further fueled calls for Tokyo to beef up its military defenses.

Such fears have escalated this year amid the two countries' rival claims to the disputed islands, called Senkaku in Japan and Diaoyu in China. The islands are small and uninhabited, but are surrounded by rich fishing grounds and possibly lucrative reserves of natural gas.

Largely in response, Japan is strengthening its naval fleet by acquiring amphibious landing craft and is also mulling the purchase of unmanned drones to improve its offshore surveillance capabilities.