Tokyo, Dec 2 (IANS): The Japan Aerospace Exploration Agency (JAXA) is building a low-cost space rocket with the help of Japanese tech manufacturer Canon, reports said on Friday.

The project would use Canon's experience in designing smaller and lighter control instruments with a view to create the world's smallest satellite launch vehicle, Efe news reported.

The three-stage rocket, 52 cm in diameter and just under 10 metres (32.8 ft) long, will be an improvement upon the two-stage SS-520 JAXA model.

The launch would cost less than a tenth of what a conventional launch costs.

The JAXA, which first announced the project on November 20, intends to use the device to place microsatellites into orbit with a first test launch in early 2017 from the Uchinoura Space Center in Japan.

With this, Canon joins the growing bandwagon of private Japanese players entering a government-dominated sector, where around 90 per cent of Japanese space industry sales - pegged at around $2.63 billion - correspond to the public sector.

Weather and defence satellites presently in use tend to be large and commissioned by the administration.

However, the last few years saw a rise in development of smaller devices by private firms for traffic management or geographical surveys.

The demand for rockets to such devices is expected to rise as the aerospace sector booms.

Companies such as HIS travel agency and All Nippon Airways parent company ANA Holdings, have already entered the arena.

Both have announced they will invest in PD Aerospace, a Nagoya-based startup which works on manned spacecrafts and hopes to conduct its first commercial space flight in 2023.