The government may still build Aegis Ashore missile batteries to defend against attacks by North Korea and other regional rivals, including China, a source said just weeks after reports that the proposal had been killed.

Defense Minister Taro Kono last month cancelled plans to build two Aegis Ashore sites, citing cost and concerns that falling booster stages from the interceptor missiles could drop on residents.

Japan, however, has not cancelled the $1 billion contract for the defense system's radars, built by Lockheed Martin, and is mulling a technical assessment from the U.S. government that makes recommendations on using other sites that would eliminate the safety issues, said the source, who has direct knowledge of the process.