Speaking at a forum organised by an inter-agency office of the government, Lee said on Friday that Japan can "start with good relations with its neighbours, especially with China", Xinhua reported.
Japanese Prime Minister Shinzo Abe has been trying to lift the Japanese economy after two difficult decades with a strategy known as Abenomics, which consists of three "arrows" such as expansionary monetary policy, fiscal stimulus and structural reforms.
There have been signs of the mood being lifted, as the stock markets rose and the business sentiments improved. The real economy is also showing signs of improvement. Winning bid to host Olympics 2020 has given Japan another boost, Lee said.
Lee said Singapore welcomes Japan joining the Trans-Pacific Partnership talks, which is a good sign.