TOKYO • Japan's Self-Defence Forces (SDF) will carry out a simulated exercise next week on the assumption that China and Taiwan are engaged in a military clash, a government source has said.

The SDF will carry out the exercise from Jan 23 to Jan 27, with the United States military participating as an observer, the source said.

The drill will take place based on a scenario that the US military and the SDF jointly deal with Chinese military forces in the event of a clash between China and Taiwan, reported Kyodo news agency.

Contentious new security legislation, which took effect in March last year, allows Japan to supply ammunition to foreign defence forces in its response to situations deemed to have an "important influence on Japan's peace and security".

The old law allowed the SDF to conduct such activities only in an emergency occurring in areas surrounding Japan.

The SDF carried out its first joint exercise with US forces in November last year to simulate new duties allowed under the new security legislation.

The simulated exercise will take place at a time when relations between China and Taiwan are strained since a phone call last month between US President-elect Donald Trump and Taiwan President Tsai Ing-wen.

The upcoming exercise was planned before Mr Trump was elected to be the next US president, the source told Kyodo.

Earlier this week, Taiwan conducted two days of military drills simulating an attack by China.

The drills came after Beijing's only aircraft carrier sailed through the Taiwan Strait last week in what was seen as a show of strength. The Liaoning did not enter Taiwanese waters but went into an area covered by its air defence zone.