The Australian and Japanese prime ministers will meet to discuss economic development and regional security, with the government saying trade is improving.
Trade between Australia and Japan is flourishing under the free trade agreement, with discussions about shared economic development and regional security set to be the focus of a meeting between the countries' two prime ministers.
Japanese Prime Minister Shinzo Abe and his wife Akie arrived in Sydney on Friday night and will meet Malcolm Turnbull on Saturday, during the weekend which marks the two-year anniversary of the Japan-Australia Economic Partnership Agreement.
Under the deal, more than 97 per cent of Australian products are imported into Japan duty free and a further round of tariff cuts are due to come into effect on April 1, trade minister Steven Ciobo said.
"It has given Aussie exporters an extra competitive edge when competing in Japan, Australia's second largest export market and the world's third largest economy," he said.
The next round of tariff reductions will help the beef, tuna, natural honey, oats and wine sectors.
Following a reduction in import duties from 15 per cent to 9 per cent under the JAEPA, wine exports to Japan have already grown more than 12 per cent with duties scheduled to be eliminated in 2021.
Exports of beef have climbed about 30 per cent as tariffs of up to 38.5 per cent are lowered as part of the deal and are now worth $793 million, Mr Ciobo said.
Trade, economic opportunities and regional security are set to be the focus of meetings between Mr Turnbull and Mr Abe, who is on a six-day diplomatic tour which takes in the Philippines, Indonesia and Vietnam.
"Japan and Australia are great friends," Mr Turnbull said on Friday.
"We have a great collaboration."
As well as discussing agricultural trade, it is expected a revised acquisition and cross-servicing deal will be signed, under which the Australian defence force will be able to supply ammunition to the Japanese military for the first time.
Mr Abe last visited Australia in July 2014 and this trip comes after Japan lost out to a French ship builder for the contract to construct Australia's new fleet of submarines.