My brother Nick has started posting again at Nick No Nihon, and I think his post answering the question "is King Kong racist?" is a great place to start. He also knows a lot about Japan, and I think his take on Japan's inevitable militarization is quite worth reading.
PM Koizumi knows that if Japan is to become a world super power, it will need a full blown military, not just a Self-Defense Force. To the extent that Koizumi can make the war in Iraq a good thing for Japan, politically and economically, he will also be able to undermine domestic opposition to the eventual creation of a Japanese military. Article IX of the Japanese Constitution (promulgated in 1946) prevents the creation of such a military, but Constitutions can be amended, and some in Japan think it is time to revise or repeal Article IX. Pacifism is not deep-seeded in Japanese culture, after all... In a culture characterized by more than fifteen centuries of isolation, homogeneity, and civil war, sixty years of outward-facing pacifism is not enough to establish a tradition. Article IX is going to go. And Koizumi is showing it the door.
With respect to the more immediate issue of the joint missile development project undertaken by the U.S. and Japan, well, that's just another sign that Japan is beginning to recognize the potential collateral benefits of having a well-funded military-industrial complex.
As Nick says, America stands to benefit a great deal from Japanese cooperation. Looks like the investment we put into Japan at the end of WW2 is still paying dividends.... Just imagine how great an ally Iraq might be in 50 years.