TOKYO (Reuters) - Japan's government will allow Kawasaki Heavy Industries Ltd <7012. T> to sell engine parts for use by the British navy, deciding it would not violate a long-standing ban on arms exports, Japanese media reported on Monday.

Kawasaki Heavy will sell the gas turbine engine components to Rolls-Royce Holdings PLC <RR. L>, which will supply them to the Royal Navy, the Nikkei newspaper and Kyodo News reported without specifying a value.

The companies are long-time technical partners, Kyodo reported.

Kawasaki Heavy and defence ministry representatives could not be reached for comment by Reuters on Monday, a national holiday in Japan.

The government is reviewing defence policies including its self-imposed restrictions on arms sales, which amount to a general ban but allow for exports under certain conditions.

Easing restrictions is widely seen as a way to make Japan's defence industry more competitive and to lower the government's procurement costs.

Prime Minister Shinzo Abe plans to overhaul arms exports policies by the end of the year, Kyodo reported.

The government decided to allow Kawasaki Heavy to ship the parts because they have been used in the private sector and so should not be treated as weapons, the Nikkei and Kyodo reported.

(Reporting by Nathan Layne; Editing by Christopher Cushing)


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