A federal parliamentary committee examined what a reciprocal access agreement between both nations' defence forces would look like, given the death penalty in Japan.
Australia opposes capital punishment.
The committee said while it recognised opposition to the death penalty and immunity for Australians in Japan couldn't be achieved, extra steps had been taken to ensure the safety of troops.
Additional safeguards include immediate access to legal counsel and not being detained without adequate cause, a right to challenge the legality of pre-trial detention and the entitlement to cross-examine a witness.
Proponents argued the agreement be ticked off due to the deteriorating security situation in the Indo-Pacific.
But lawyers have raised serious concerns about Australian troops being exposed to the death penalty.
The report recommended ratifying the treaty as "on balance it is in the national interest".
Committee chair Josh Wilson said the agreement builds on the longstanding bilateral relationship.
"It would both simplify and strengthen defence co-operation between the two countries in the context of a deteriorating strategic environment," he said.
The reciprocal access agreement was signed in January by former prime minister Scott Morrison during a visit from Japanese Prime Minister Fumio Kishida.
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