By Kiyoshi Takenaka and Nobuhiro Kubo TOKYO (Reuters) - Japan eased its weapons export restrictions on Tuesday in the first major overhaul of arms transfer policy in nearly half a century, as Prime Minister Shinzo Abe seeks to fortify ties with allies and bolster the domestic defense industry. In a move likely to anger China, where bitter memories of Japan's past militarism run deep, the government decided to allow arms exports and participation in joint weapons development and production when they serve international peace and Japan's security. That is a shift from a decades-old policy of banning all weapons exports in principle, although quite a few exceptions to the rule have been made over the years, such as the transfer of arms technology to the United States, Japan's closest ally. "If you live in a closed market like the Japanese defense industry does, you clearly lag behind in technological development." But even under the new regime, Japan is to focus mainly on non-lethal defense gear such as patrol ships and mine detectors and says it has no plan to export such weapons as tanks and fighter jets.