The report in the top-selling Yomiuri Shimbun, citing unnamed ministry officials, said the unmanned, 10-metre long sub could run for a month under the sea on a single charge before returning to home base.
However, the defence ministry later told AFP that it had not agreed to joint development plans with Washington, but confirmed that it was working independently on what it called an "unmanned underwater vehicle (UUV)".
It supplied an artist's rendering of a yellow, submarine-shaped vehicle cruising the ocean depths.
"The UUV is purely for patrolling -- it's not a military weapon," the official added.
Japan is a leader in fuel cells which generate emissions-free energy through a chemical reaction of hydrogen and oxygen, and are most commonly associated with environmentally friendly vehicles.
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