Japanese firms have decided to drop their plans to get involved in a high-speed rail project connecting Kuala Lumpur and Singapore, government and company sources said Thursday.

The companies, including East Japan Railway, had hoped to utilize Japan's shinkansen system in the project but they have decided it will be too risky without the Malaysian government's financial support, said the sources, including those at the Japanese and Malaysian governments.

The development could allow rival Chinese businesses to further solidify their footprint in infrastructure building in East Asia after they completed a high-speed railway in 2023 in Indonesia and are currently building another in Thailand.