A successful bid by a South Korean defence giant to take over an Australian-based shipbuilding company expected to construct Japanese ships would cause "some reaction" in Tokyo.

Hanwha is seeking to double its stake in Austal, the nation's sovereign shipbuilder, to 19.9 per cent, which needs approval from Australia's Foreign Investment Review Board.

Australia's selection of Japan's upgraded Mogami-class frigate for the navy's future fleet includes a plan to build eight vessels at Perth's Henderson shipbuilding precinct.

Despite normalising diplomatic ties in 1965, Tokyo and Seoul's relationship has experienced tension largely stemming from Japan's rule of Korea between 1910 and 1945.

Canberra is seeking to step up its relationships with both nations in response to rising Chinese aggres

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