Japan fired two Type-88 missiles on Wednesday as part of the Balikatan exercises in the Philippines, sinking a retired Philippine navy corvette in the South China Sea. The exercises, which involve 17,000 military personnel from several countries, including the US, Australia, and Canada, are part of Japan's efforts to deepen security cooperation with regional allies.

The missile test has drawn criticism from China, which views Japan's military expansion as a threat. Chinese Foreign Ministry spokesperson Lin Jian said that Japan's actions are an example of the country's push for remilitarisation.

Japan's Prime Minister Sanae Takaichi has accelerated the country's shift towards a more muscular defence policy, including the relaxation of rules to allow exports of lethal military hardware. The country has also moved to obtain counterstrike capabilities and has deepened security cooperation with regional allies.

The exercises have also seen the participation of Japan's Amphibious Rapid Deployment Brigade in counter-landing drills with US, Philippine, and Canadian forces. The Balikatan exercises are set to conclude on Friday.

The immediate outlook is that the tensions between Japan and China are likely to continue, with China viewing Japan's military expansion as a threat. The Japanese government is expected to continue its efforts to deepen security cooperation with regional allies, while China is likely to maintain its criticism of Japan's military actions.