SINGAPORE (Reuters) - Japan is strengthening its economy and military to play a responsible international role, Defence Minister Itsunori Onodera said on Saturday, seeking to defuse suspicion of neighbours scarred by its attacks and occupations last century.

SINGAPORE (Reuters) - Japan is strengthening its economy and military to play a responsible international role, Defence Minister Itsunori Onodera said on Saturday, seeking to defuse suspicion of neighbours scarred by its attacks and occupations last century.

Japan, a U.S. ally that is in dispute with China over maritime territory and within range of North Korean missiles, "caused tremendous damage and suffering" in the past but wants to look to the future by promoting cooperation, he said.

"A strong Japan will play a responsible role in the area of regional security and exercise strong leadership as expected by the international community," Onodera said at the Shangri-La Dialogue, an annual regional security forum in Singapore.

To meet those goals, Japan has raised its defence budget in fiscal 2013 for the first time in 11 years and the size of its military forces for the first time in eight years, he said. It is also reviewing its defence policy and is in the process of creating a National Security Council.

"Some say Japan is tilting toward the right because of these initiatives. Moreover, we sometimes hear criticism that Japan is abandoning its identity as a pacifist nation and is attempting to challenge the existing international order," Onodera said.

"These views are total misperceptions," he said. "These efforts are crucial in the pursuit of our national interest, which is to maintain and strengthen international order based on fundamental values of freedom, democracy and the rule of law."

Asked whether Japan has plans to develop nuclear weapons, Onodera said: "We don't think of doing that at all and we have three non-nuclear principles which we adhere to."

The U.S. military presence in Asia is "indispensable" to stability and Tokyo welcomes the "pivot" in Washington's attention to the fast-growing region, he said, adding that Japan's relations with China were "extremely important".

Stressing the need for dialogue, he said Japan believed in freedom of navigation and supported the efforts of the 10-member Association of Southeast Asian Nations to establish a code of conduct to reduce tension with China over the South China Sea.

"Given the increasingly difficult security environment, the Japanese government is now undertaking a review of the current national defence programme guidelines, which we hope to complete by the end of 2013," Onodera said.

"The aim of the review is to maintain a defence posture that can firmly defend our territorial land, water and air space by improving the readiness of the Self Defence Forces to further strengthen the U.S. alliance and to contribute more to the improvement of the international security environment."

The proposed National Security Council is designed to better respond to "unforeseen emergencies" and form long-term security and foreign policies, he said. A bill to establish the council will go to Japan's parliament this month. (Editing by Robert Birsel)