TOKYO Mitsubishi Heavy Industries on Wednesday said it expects to see record defence orders this business year as Japan embarks on its biggest military build up since World War Two.

Japan's biggest defence contractor forecast orders at its Aircraft, defence and space unit to rise 42% to 1 trillion yen ($7.40 billion) in the first year of Japan's five-year $318 billion military build up beginning in April. The plan will double defence spending to around 2% of gross domestic product.

In April Japan's Ministry of Defence awarded Mitsubishi Heavy contracts worth 378 billion yen to build a new longer-range missile force to deter neighbouring China from using military force in East Asia.

The maker of the World War Two era Zero fighter plane has also been picked by Japan to partner with Britain's BAE Systems PLC and Italy's Leonardo to develop a new joint advanced fighter that the three countries plan to deploy by the middle of the next decade.

($1 = 135.0500 yen)

(Reporting by Tim Kelly; Editing by Stephen Coates)