Television footage showed the upturned hull of a small fishing boat in the Seto Inland Sea off Hiroshima after what the coastguard said was a collision at around 8 a.m. (2300 GMT Tuesday) with the 8,900-ton Osumi, a naval transport ship.
Jiji Press said the 67-year-old skipper and another man, 66, had been confirmed dead in hospital, while the other two had been rescued.
All four people aboard the fishing boat were pulled from the water after the collision.
A coastguard spokesman earlier said two of them were conscious, but the other two — including the captain — were in cardio-respiratory arrest. The term is usually used by first responders of people who have died but have not yet been certified by a doctor.
Defense Minister Itsunori Onodera expressed regret for the incident and pledged his ministry’s full cooperation in the coastguard’s investigation into its cause.
The 178-metre (584-feet) Osumi had recently been deployed to the Philippines, transporting aid supplies for victims of Typhoon “Yolanda” (Haiyan) that struck in November.
The incident, which was receiving widespread media coverage, is a potentially sensitive one for the military and the government, with coastal communities frequently expressing exasperation at what they see as high-handedness by the navy.
A 2008 incident in which a father and a son died when their boat collided with a destroyer caused a widespread backlash, with local leaders pointing to the vast superiority of navigation equipment on the Aegis-equipped ship.
The defense ministry was accused of attempting a cover-up as it flew the vessel’s duty officer to Tokyo for questioning before any official probe was opened.
Then-prime minister Yasuo Fukuda visited the victims’ family in Chiba, east of Tokyo, and made a tearful apology amid growing calls for the resignation of his defense chief.
The government of current Prime Minister Shinzo Abe was quick to react to Wednesday’s incident, announcing the setting-up of a task force.
“The coastguard has already launched the investigation into the cause,” said Chief Cabinet Secretary Yoshihide Suga. “I’d like to express my heartfelt sympathy towards those who have suffered the damage”.
The Seto Inland Sea is a relatively busy waterway that serves a number of major ports, as well as supporting a vibrant fishery.