The New York Times quoted the Japanese Defense Ministry as saying the exercise would involve 37,000 Japanese and 10,000 U.S. military personnel with U.S. Navy ships carrying Japanese troops.
Japanese Chief Cabinet Secretary Osamu Fujimura assured the event was not aimed at a specific country.
The Times said Japan canceled a joint amphibious landing on a remote island with experts saying the decision was taken so as to not provoke China.
Since September, Japan and China have seen an escalation of their territorial dispute over a group of islands in the East China Sea, called Senkaku in Japan and Diaoyu in China. Against repeated Japanese protests, Chinese patrol ships have been entering the disputed waters to assert Beijing's claims.
The BBC quoted a U.S. statement that the exercise was aimed at improving "interoperability required to effectively defend Japan or respond to a crisis in the Asia-Pacific region."
China's official media has been carrying a number of articles strongly attacking Japan's claims to the islands as well as the U.S. stand on the dispute. There have also been a number of protests in Chinese cities against Japan, affecting their huge bilateral trade estimated at about $345 billion annually.