Itsunori Onodera's comments came amid heightened tensions between the two countries over islands known as Senkaku in Japan and Diaoyu in China.
Rhetoric has risen in recent days, with Japan reporting increased activity from China in the area.
Last week, Japan scrambled fighter jets three times after Chinese military aircraft flew near Japanese airspace.
The two countries have argued for decades over the islands, which Japan controls. They are also claimed by Taiwan.
In 2012, the Japanese government bought three of the islands from their private Japanese owner, a move which sparked a new row and protests in Chinese cities.
Since then, Chinese ships have been sailing in and out of what Japan says are its territorial waters, prompting fears of a clash.
Q&A: China-Japan islands row
Mr Onodera told reporters in Tokyo he believed "the intrusions by China in the territorial waters around the Senkaku islands fall in the 'grey zone' [between] peacetime and an emergency situation".
On Monday four Chinese ships entered waters around the islands. The move came after Japan scrambled fighters three days in a row after Chinese aircraft flew over international waters near Japan's southern island of Okinawa.
Over the weekend, Japanese Prime Minister Shinzo Abe said Japan should be more assertive in countering China in Asia.
He also, reports said, last week approved defence plans that envisaged using air force planes to shoot down unmanned aircraft in Japanese airspace.
Last month, an unmanned drone flew close to the islands. The drone appeared to return to Chinese airspace, reports say.
In response, China's Defence Ministry said any attempt by Japan to shoot down Chinese aircraft "would constitute a serious provocation, an act of war of sorts".
Chinese Foreign Ministry spokeswoman Hua Chunying said on Tuesday that Japan should "stop hyping up the external threat theory and elaborate to the international community the true intent of [its] military build-up".
The chain of disputed islands lies east of the Chinese mainland and south-west of Japan's Okinawa island. They are close to strategically important shipping lanes and offer rich fishing grounds.
Japan's defence minister says China's behaviour over disputed East China Sea islands is jeopardising peace.