Japan and the United States on Friday signed an agreement under which Tokyo will maintain the budget to host U.S. forces over the next five fiscal years from April amid security challenges posed by North Korea's nuclear ambitions.

"The presence of U.S. forces in Japan is indispensable for the security of Japan and for the peace and security of the region," Japanese Foreign Minister Fumio Kishida said at the signing ceremony with U.S. Ambassador to Japan Caroline Kennedy in Tokyo.

"As we have seen in North Korea's nuclear test (earlier this month), the security environment is becoming increasingly severe and the importance of U.S. forces in Japan is greatly increasing," Kishida said, adding that the support for U.S. forces is "strategically important."