Japan's flagship H-3 rocket reached orbit and released two small observation satellites in a key second test following a failed debut launch last year, buoying hope for the country in the global space race.

The H-3 rocket blasted off from the Tanegashima Space Center on time Saturday morning, two days after its originally scheduled liftoff was delayed by bad weather.

The rocket successfully reached orbit at an altitude of about 670 kilometers (about 420 miles) and released two satellites, the Japan Aerospace Exploration Agency, or JAXA, said.

“We feel so relieved to be able to announce the good results," JAXA President Hiroshi Yamakawa told a news conference.

The H-3's main missions are to secure independent access to space and be competitive as international demand for satellite launches grows. “We made a big first step today toward achieving that goal," Yamakawa said.

The launch is a boost for Japan’s space program following a recent streak of successes, including a historic precision touchdown on the moon of an unmanned spacecraft last month.

The liftoff was closely watched as a test for Japan’s space development after H-3, in its debut flight last March, failed to ignite the second-stage engine. JAXA and its main contractor Mitsubishi Heavy Industries have been developing H-3 as a successor to its current mainstay, H-2A, which is set to retire after two more flights.

As the rocket soared and released its first payload successfully, project members at the JAXA command center cheered and hugged each other in livestreaming footage. NHK television showed some staff at a press center crying with relief and joy.

JAXA H-3 project manager Masashi Okada called the result “perfect,” saying H-3 cleared all missions set for Saturday's flight. “After a long wait, the newborn H-3 finally had its first cry.”

“I now feel a heavy load taken off my shoulders. But now is the real start for H-3, and we will work to steadily improve it," Okada said.

The H-3 No. 2 rocket was decorated with thousands of stickers carrying messages sent from well-wishers around the country.

Two microsatellites — observation satellite CE-SAT-IE, developed by Canon Electronics, and TIRSAT, which was co-developed by a number of companies and universities — were piggybacked on the H-3 Saturday. Their makers said they were willing to take the chance as they see a growing market in the satellite business.

The 57-meter-long H-3 is designed to carry larger payloads than H-2A at much lower costs of about 50 billion yen ($330 million), to be globally competitive.

Masayuki Eguchi, head of defense and space segment at Mitsubishi Heavy, said his company hopes to achieve better price competitiveness after about a dozen more launches.

“I'm delighted to see this incredible accomplishment in the space sector right after the success of the SLIM moon landing,” Prime Minister Fumio Kishida said on X, formerly Twitter. “I expect the Japanese mainstay rocket will steadily make achievement.”

Last month, a H-2A rocket successfully placed a spy satellite into its planned orbit, and days later JAXA’s unmanned spacecraft SLIM made the world’s first “pinpoint” moon landing then captured lunar data.

The H-3 is designed to carry a 6.5 metric ton payload and over the long-term, the agency wants to reduce per-launch cost to as low as 5 billion yen - half of what an H-2A launch costs - by adopting simpler structures and automotive-grade electronics.

JAXA and primary contractor Mitsubishi Heavy Industries hope those features will help them win launch orders from global clients.

"It's taken some time for the program to get to this point but with this launch, they will be fielding inquiries from around the world," said Ko Ogasawara, a professor at the Tokyo University of Science.

The Japanese government plans to launch about 20 satellites and probes with H-3 rockets by 2030 for domestic use. The H-3 is scheduled to deliver a lunar explorer for the joint Japan-India LUPEX project in 2025 as well as cargo spacecraft for the U.S.-led Artemis moon exploration program in the future.

Satellite launch demands have skyrocketed thanks to the rise of affordable commercial vehicles such as SpaceX's reusable Falcon 9 and a number of new rockets are being tested this year.

Last month marked the successful inaugural flight of the United Launch Alliance’s Vulcan rocket, a joint venture between Boeing and Lockheed Martin. The European Space Agency also plans to launch its lower-cost Ariane 6 for the first time this year.

Eguchi said the company has a long-term target of launching eight to 10 rockets a year, which would boost its 50 billion yen space business sales by 20-30%.

That would require additional production capacity, he added, noting the company's factories can currently only produce five to six H-3 rockets a year.