In a foreign policy speech, Kan also reaffirmed the importance of the U.S. military presence in Japan given regional tensions including over North Korea's nuclear program.
While stressing the need for stronger relations with the United States, he called for tighter ties with Asian neighbours such as China but reiterated Japan's concern over China's military build-up.
Kan has come under fire from domestic critics for not having a coherent diplomatic strategy and mishandling territorial rows with China and Russia. Ties with ally Washington frayed under his predecessor due to a dispute over a U.S. Marines airbase.
On trade, Kan said he wanted to press ahead with studies into the Trans-Pacific Partnership (TPP), a U.S.-led free trade initiative. Many Japanese businesses are keen to join the TPP, but powerful farming lobbies have resisted.
"When my cabinet was formed last June, I felt it was necessary to restore an energetic Japan and to break a sense of deadlock that has continued for nearly 20 years," he said in the speech.
"The key is to open up the country, both in terms of thinking and of the economy."
The TPP started as a trade pact between Singapore, New Zealand, Chile and Brunei, who have since been joined in talks by Australia, Peru, Vietnam, Malaysia, and the United States.
Adding Japan's $5 trillion economy would greatly increase the potential market-opening gains of the proposed pact.
But it could also complicate the negotiations, since Tokyo would not only have to free up agriculture but address U.S. concerns that planned postal system reforms will hurt private competitors in the insurance, banking and express delivery sectors.
Japan's previous trade deals have left out the heavily protected farm sector, which holds considerable political clout due to an electoral system that places a greater weight on rural votes.
Kan expressed his concern about growing regional rows over maritime resources, and said Japan is ready to play a key role in keeping further disputes from occurring.
"Waters in the Asia-Pacific area are the source of wealth for the whole region. But it should not be overlooked that disputes surrounding rights to maritime resources have emerged in recent years as a destabilising factor," Kan said.
"We aim to play a leadership role in setting up new maritime rules to prevent new disputes and keep the waters in the region as the ocean of peace."
China has warned its neighbours to stay off disputed islands in the South China Sea, declaring it holds "indisputable sovereignty" over the waters.
Sino-Japanese relations deteriorated sharply after September, when Japan detained a Chinese skipper whose trawler collided with Japanese patrol boats near a chain of disputed islands in the East China Sea, called Senkaku in Japan and Diaoyu in China.
The inhabited islands are thought to lie near potential oil and gas reserves in an area rich with fish. (Reuters)
