Let me lead with my chin on this story and before I say anything else, I'll tell you what bothers me about it.
First, there's no obvious news story that it's based on. The article quotes Japan’s basic plan on space policy, which was revised June 13 this year, but that link is to a Japanese language site which I can't use since I don't read or speak the language. The site has a button at the top right that says "ENGLISH" which led to some dead end searches. As close as I can get to a Space Policy link doesn't turn up anything that seems to be related. There's no June 13th update on the site; it jumps from February 21 to August 8.
Second, it's datelined as coming from Baku, Azerbaijan. As far as I know JAXA does nothing, space-related or not, in Azerbaijan. I don't see
anything in the story related to that location. It may simply be where
the reporter filing the story is based. The article says the author,
Andrew Jones, covers China's space industry for SpaceNews - but I don't think China does anything space-related there, either.
That said, the story refers to things we know and see about Japan's Aerospace Exploration Agency (JAXA) and doesn't seem far-fetched. To begin with, the new launcher will be designed jointly by JAXA and Mitsubishi Heavy Industries (MHI). It's being designed to be reusable while also increasing payload capability and decreasing launch cost.
MHI is deeply entwined in the Japanese space program. They've worked on a couple of vehicles that I've covered here, at least the H3 and H-2A and probably more. The new rocket is to be a follow on to the H3.
H3 is an expendable rocket intended to be a more capable and cost-effective successor to the H-2A rocket. It had its first flight in March, but a second stage issue resulted in loss of the mission. Both rockets are powered by liquid hydrogen-liquid oxygen propellant mix.
The fuel for the reusable rocket hasn't been decided, but the team is looking
at methane/oxygen or methalox, like SpaceX's Starship/SuperHeavy, ULA's Vulcan, Blue
Origin's New Glenn and China's Zhuque-2 rocket, to name a few. They're also looking at staying with hydrogen/LOX.
JAXA said it is targeting cutting cost per kilogram to low Earth orbit (LEO) in half compared to the H3. Reusability will also allow an increase in launch frequency.
JAXA's launch of their current lunar mission back on Sept. 6, atop the MHI H-2A. Screen capture.
And an "oh, by the way" addition, the SLIM lunar lander (also called the Moon Sniper) being launched in that picture is transferring from Earth to Lunar orbit and should be in high lunar orbit by Wednesday, Oct. 4.
At the risk of sounding like I say this all the time because I do, I see this as more evidence of how the reusability of Falcon 9 is changing everything. Any space agency or corporation not looking into reusability is running the risk of being the equivalent of a horse-drawn buggy in the Indianapolis 500.