Japan administers the Senkaku/Diaoyu Islands, which China also claims.
Sugiyama expressed grave concern and stressed that China should not stem the tide for improving Japan-China relations.
The United States has long declined to take a position on the islands' sovereignty; however, Presidents Barack Obama and Donald Trump have both declared that the Senkakus will be protected under the U.S-Japan security alliance.
The Japanese military first observed a submarine of unknown origin entering the contiguous zone just outside its territorial waters northeast of Miyako Island on Wednesday evening, a Ministry of Defense statement said. Also, with Prime Minister Shinzo Abe promising to reach out to China this year, then China's recent deployment of a frigate and submarine is bound to tie the hands of the current leader of Japan if this policy is continued.
"This behavior unilaterally raises tensions, and we are seriously concerned about it", Defense Minister Itsunori Onodera told the press. After all, for Japan, the Senkaku area is part of protecting smaller islands and islets throughout the Okinawa region.
Japan protested to China on Friday after a foreign submarine in waters near disputed islands in the East China Sea was confirmed to be Chinese, calling it a unilateral action and a "serious escalation" that raised bilateral tensions.More news: Trump Plans to Bring Eight Cabinet Members to Davos
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The submarine was seen again on Thursday along with the Chinese frigate, and both had left the area by Thursday afternoon, according to the ministry.
Onodera made the statement during a visit to Hawaii Thursday.
Japan's NHK reported Japan mobilized a response near Taisho after a Chinese ship was detected in the zone adjacent to territorial waters.
"The [Diaoyu Islands] are a natural part of Chinese territory", Lu Kang, Beijing's foreign ministry spokesman, said Thursday, according to UPI. The Japanese Ministry of Defense did not immediately clarify if the Chinese frigate, which was a Type 054A Jiangkai-II-class frigate, belonged to the People's Liberation Army-Navy (PLAN) or the China Coast Guard, which uses the Type 054A as well.
The presence of a submarine during the latest incident adds a new dimension to the fairly regular Chinese incursions into these waters.
The ministry is closely monitoring the submarine's move and collecting information.