On a cloudy Tuesday afternoon, seven T74 battle tanks designed and built by the Mitsubishi group are on maneuvers in this wooded training ground on Japan's Hokkaido Island. Their crews are getting some rare practice with live ammunition.

One by one, the tanks roll to a firing line. With aim sharpened by laser devices on their turrets, they lob high-explosive shells at wood and iron plates 1,500 yards away. Many land square on target. As the smoke dissipates, each shot is rated by gunnery instructors who look on like a quality control team on a Japanese factory floor.

Forty years after its surrender ended World War II, Japan again has modern, disciplined armed forces at its command. They have never been tested in battle. But like this tank unit, their preparation shows the devotion to duty and detail that has served Japanese industry so well.

Japan, the country with the famous no-war constitution, limits defense spending to 1 percent of the gross national product. Nonetheless, it is conducting a sustained buildup that has made it the world's eighth largest defense spender after France. This fiscal year, the budget for its 245,000-member military grew by 5.4 percent in real terms to reach $13 billion. Most other government programs were frozen.

With an eye on Soviet forces, Japanese warships and aircraft are today patrolling deep into the Pacific Ocean. Plans are being laid for defense of sea lanes 1,000 miles from Japanese shores. Gradually, Japan is rewriting the equation of power in northeast Asia.

Yet the Self-Defense Forces, as postwar politics dictate the military here be called, are still neglected in a society preoccupied with commerce. Many analysts say they remain seriously short on many crucial commodities of the soldier's trade, including recruits, ammunition and public enthusiasm.

"Within the limitations encountered, we are doing the best job we can," said Lt. Col. Susumu Iwasaru, commander of the 2nd Tank Batallion of the Army's Hokkaido-based 2nd Division. Each of his T74s fires only a few dozen practice shells a year, compared to the 134 rounds fired annually by U.S. tanks in active U.S. Army units.

Public acceptance of the military seems to be growing. But the government still feels compelled to conduct an opinion poll each year to establish that a majority of Japanese support the existence of armed forces. More than 80 percent said they did in this year's poll.

For the United States, which maintains 48,000 troops in Japan and is committed by a 1951 treaty to come to its aid in the event of war, the buildup is welcome news. It is coming as the two governments build closer cooperation between their forces in the field.

Still, Washington continues to complain that things are moving too slowly. This summer, both the House and the Senate passed resolutions calling for Japan to spend more. Many U.S. officials say current levels shirk Japan's international responsibilities and unfairly subsidize its export industries.

It is difficult to quantify what the cap on defense spending has meant for Japan's vaunted "economic miracle." But if Japan were to spend at the same rate as the United States, it would have to come up with about $65 billion more in tax revenues this year, money that would then not be available for new equipment for factories, research and development, education and other programs that figure in Japan's economic success.

The United States is itself responsible for a good deal of today's state of affairs. After the surrender of 1945, U.S. occupation troops dissolved the defeated Imperial Forces and sent 7 million Japanese soldiers home. Americans drafted a new constitution, in which Japan renounced war and pledged that "land, sea and air forces, as well as other war potential, will never be maintained."

But when war erupted in neighboring Korea in 1950, U.S. strategists shifted gears and concluded that a rearmed Japan was crucial to regional stability. Imperial Forces veterans were called back into uniform and three services were founded in 1954 after the U.S. occupation ended.

They were christened the Ground, Air and Maritime Self-Defense Forces, to support the fiction that all was in accord with the constitution. Many terms of the imperial military lexicon, including names for rank, were purged and replaced with less martial sounding ones.

Substantive restrictions were built in too, in deference to fears of a recurring militarism and loss of civilian control. To this day, Japan has no military courts and no draft. It has no marine corps because it is thought that marines are for invasions, or centralized military intelligence agency. Defense gets only an agency in the national government, not a full ministry.

The atom bomb attacks on Hiroshima and Nagasaki have also left a special imprint on military policy. Japan has pledged never to acquire nuclear weapons, although it accepts protection under the U.S. "nuclear umbrella." Nor is it preparing its troops in any systematic fashion to fight on radiation-contaminated battlefields.

The Army is the largest service, with 155,000 members and about 40 percent of the total defense budget. But it is the least modernized of the three. The Air Force flies U.S.-designed F104, F4 and F15 interceptors, as well as Japanese-developed F1 fighters. The Navy's vessels are small and oriented toward antisubmarine warfare and coastal defense. The Navy also has 14 submarines.

The official mission of the armed forces is deterrence of aggression from any quarter. But "enemy" in Japan normally means the Soviet Union, which is seen as pursuing a menacing buildup. Moscow is said to have expanded its Pacific fleet to 825 ships in recent years and to have put 135 SS20 nuclear-tipped, multiple-warhead missiles, many believed to be targeted on Japan, in Siberia.

Japanese troops are deployed accordingly. Army firepower is concentrated in Hokkaido, which lies only a few miles from the Soviets' Sakhalin Island and a chain of islands claimed by the Japanese, where the Soviets are reported to have stationed 10,000 troops and 40 MiG23 jets.

Japanese F15s scramble about three times a day to meet unidentified aircraft, often Soviet, approaching Japanese air space. Japanese intelligence units monitor Soviet communications. It was they who recorded a Soviet fighter pilot's radio message in 1983 that he had just shot down a Korean Air Lines jumbo jet. The Japanese Navy tracks Soviet submarines with seabed sensors and U.S. P3C Orion patrol planes.

War scenarios generally have Americans fighting alongside Japanese. American units would hit the Soviet mainland. The Japanese would defend the rear and with mines, submarines and air power close straits into the Sea of Japan to bottle up the Soviet Pacific fleet, which is headquartered inside at Vladivostok.

The Soviets, the Japanese assume, might attempt to land on Hokkaido to secure the strait that the island forms with Sakhalin. There they would meet Japanese tanks and infantry trained in snow and mountain operations and eventually be driven back.

That is how it is supposed to work. True combat readiness, however, remains in question. In war games last November on Hokkaido, a Japanese tank regiment cast as a Soviet invasion force reportedly rolled through mine fields and fortifications to disperse defenders in 20 minutes. Holes in Japan's air defenses were illustrated in 1976 when a Soviet pilot flew a MiG25 undetected into Hokkaido to defect.

Most analysts give today's Japanese soldier high marks in morale and operation of sophisticated equipment. Almost every job in Japan, from street cleaner to bank president, is approached with duty in mind and soldiers would presumably do the same in combat.

"Their strength is their people," said a U.S. Army officer stationed here.

But the Japanese soldier falls seriously short in what military handbooks call "sustainability." Japan has modern jets and tanks but few supplies to keep them in action. Stocks of torpedoes and depth charges are so low that analysts say destroyers could load up only once. Air-to-air missiles are said to be slightly more plentiful; each fighter jet could fly 1 1/2 missions.

Under constant cajoling from the United States, Japan is working toward improvements in this field. The current fiscal year's $13-billion budget, for instance, will devote $600 million to ammunition alone, a 28 percent rise over last year's outlays.

This summer, Japanese legislators will probably vote the 245,000 members of the armed forces a pay raise. It would be a routine affair, were it not for an expected side effect: the breaking of a ceiling capping defense spending at 1 percent of the gross national product. The cap dates from a 1976 Cabinet resolution passed in response to criticism that arms spending was shooting up too fast.

Members of Prime Minister Yasuhiro Nakasone's Cabinet, however, privately say the defense budget should be determined by defense needs, not an arbitrary figure selected a decade ago.

Japan's defense buildup has attracted wide international attention under Nakasone's outward-looking government. But, in fact, it has been in motion with hardly a pause since the day the forces were commissioned in 1954. Growth rates are larger than those of the United States.

Long-term plans call for Japan to acquire 98 more F15s, 57 more P3Cs and nine more antisubmarine vessels by early 1991. It is part of an effort to strengthen ability to fight enemy units before they get to Japan.

The program will mean some purchases from the United States. But for the most part, Japan buys its arms from a large defense industry that has emerged here despite a ban on arms exports. The T74 tank, highly rated by foreign officers, was developed by Mitsubishi. Japan is coproducing F15 jet fighter planes on license from the United States and working on a new battle tank and shore-to-ship missile.

In recent years, the buildup has engendered suspicions in China, Korea and Southeast Asia, which Japan occupied during World War II. In general, however, leaders there seem to view it as a benign or a stabilizing factor against Soviet forces in the region. Exchange of high-ranking military visitors with China and South Korea is becoming common.

Some of the most strident opposition comes at home, led by the main national opposition group, the Japan Socialist Party. Many critics contend that the buildup and developing alliance with the United States undermine security by ensuring that Japan will be dragged into any conflict, conventional or nuclear, that erupts between the United States and Soviet Union.

The Japan-U.S. Security Treaty does not require Japanese forces to help the United States in case of war. Yet the straits blockade scenario so often discussed here suggests that it would be doing exactly that, they say.

Some critics say Moscow might feel emboldened to use nuclear weapons against U.S. bases here, on the gamble the United States would not respond in kind because the bombs had not fallen on its own territory.

Expanded defense spending is also questioned by some old-guard members of the ruling Liberal Democratic Party. They say the country has done well with limited budgets over the years and can continue to rely on Washington for protection.

For the present, Nakasone retains the upper hand, despite polls showing that only about 30 percent of the public supports a further buildup.

So critics focus on defending the 1 percent ceiling and scouring military procurement documents for weapons with any conceivable offensive application. Signs that Japan is becoming a "strategic power" -- Nakasone swears it is not -- are also fair game.

For instance, the Air Force is now eyeing purchase of its first aerial refueling tankers. It argues they would keep Japanese jets in the air against intruders for longer. Critics call them unacceptable, because they would enable Japanese planes to hit the Asian mainland. It is a gain of sorts for Nakasone that this debate can take place at all. Today's F15s have refueling capability. In the early 1970s, the equipment was deliberately removed from Japanese F4s to ensure they would never be used with U.S. tankers.

Critics fight legislative preparation for war. Japan has no mobilization law. It is unclear by what authority the government would issue emergency orders or organize war production. Strictly speaking, Japanese Army units could not even repair bomb-damaged roads or run red lights during a conflict.

The opposition is also battling, generally without success, closer cooperation between U.S. and Japanese units in the field that has been developing since the two governments signed an agreement for joint military planning in 1978.

Last September, 1,500 U.S. Army troops were flown from the United States for exercises with Japanese troops, in what U.S. officers here say was the largest such airlift ever. Japanese and U.S. warships stage regular maneuvers in the Pacific. Twice a year, multiservice command post exercises are conducted together.

Eight months ago, the two governments signed what news reports here described as an operational plan to repel a Soviet invasion. Staff officers are now working on details of wartime cooperation, such as secure radio links between their forces.

In laying plans of this sort, Japan remains very much the student of the United States. Japan's decision to attack the United States in 1941 is taken by some Japanese as proof of a lack of basic strategic sense in the Japanese military mind. Col. Iwasaru jokes that the world's best army would have American officers, German staff planners and Japanese foot soliders.

Tokyo and Washington are also nearing completion of a detailed study of defense of sea lanes leading to Japan. It is a follow-up to a 1981 commitment by Prime Minister Zenko Suzuki to develop a capability to defend ships up to 1,000 miles out from Japanese shores.

The United States contends that at present rates, that capability could never be achieved. But some Japanese civilian analysts say it is impossible with any amount of hardware, given the expanse of ocean to be protected. Tomohisa Sakanaka, a professor of international relations at Aoyama Gakuin University in Tokyo, said: "The real issue seems to be strategic cooperation between the United States and Japan, how to cope with the expanded Soviet naval and air presence in the region."