Australia and Japan on Saturday agreed to share more sensitive information and deepen military cooperation, and signed a security pact aimed at countering China’s military rise.

Prime Ministers Fumio Kishida and Anthony Albanese signed the accord in the western Australian city of Perth, revising a 15-year-old agreement drawn up when terrorism and arms proliferation were the top concerns.

“This landmark statement sends a strong signal of our strategic direction to the region,” Albanese said, welcoming the “Joint Statement on Security Cooperation.”

As part of the deal, the two countries agreed that armed forces in northern Australia would train together and “expand and strengthen cooperation on defense and intelligence sharing,” Australian officials said.

Without naming China or North Korea, Kishida said the deal was a response to an “increasingly harsh strategic environment.”

Neither Australia nor Japan have the armies of foreign intelligence agents and foreign informants needed to compete in the big leagues of global espionage.

Japan has no foreign spy agency equivalent to America’s CIA, Britain’s MI6, Russia’s FSB, or Australia’s much smaller agency ASIO.

But according to expert Bryce Wakefield, Australia and Japan have formidable signals and geospatial capabilities – electronic interception and high-tech satellites that provide invaluable intelligence on adversaries.

Wakefield, director of the Australian Institute of International Affairs, said the deal could also have broader implications, offering Japan a template to accelerate intelligence ties with countries like the UK.

Some even see the deal as another step toward Japan’s entry into the powerful Five Eyes intelligence-sharing alliance between Australia, Britain, Canada, New Zealand and the United States.

It is “a landmark event that Japan can share SIGINT with a foreign nation other than the United States,” Ken Kotani, an expert on the history of Japanese intelligence at Nihon University, told AFP.

“This will strengthen the framework of Quad (Australia, India, Japan and the United States) and is the first step for Japan’s entry into the Five Eyes,” he added.

Such a proposal would have been unthinkable a few decades ago. But events in Japan’s neighborhood have forced a reconsideration of the country’s post-World War II pacifist policies.

In recent years, North Korea has repeatedly dropped missiles over and around Japan, while China has built the world’s largest navy, transformed the world’s largest standing army, and amassed a nuclear and ballistic arsenal right on Japan’s doorstep.

However, hurdles remain to Tokyo’s closer security cooperation with allies.

Japan’s intelligence sharing with the United States and other allies has been hampered by longstanding concerns about Tokyo’s ability to handle sensitive confidential material and transmit it securely.

“To put it bluntly, Japan has traditionally leaked like a sieve,” said Brad Williams, author of a book on Japanese intelligence policy and a professor at the City University of Hong Kong.

Laws have been introduced to penalize intelligence leaks more severely, but for now Australia will likely be forced to screen any intelligence it releases to Japan for information sourced from the Five Eyes network.

Prime Ministers Kishida and Albanese also promised more cooperation on energy security.

Japan is a major buyer of Australian gas and has made a number of big bets on Australian-produced hydrogen energy as it seeks to reduce domestic power generation shortages and fossil fuel dependency.

“Japan imports 40 percent of its liquefied natural gas from Australia. Therefore, it is very important for Japan to have a stable relationship with Australia from the point of view of energy,” a Japanese official said ahead of the meeting.