By the middle of the 1950s, it was becoming apparent that the days of being able to launch torpedo attacks on an enemy fleet in the traditional style were becoming limited. Torpedoes and gunfire might have a role in a wild melee between destroyers and cruisers (as was shown in the Pescadores Incident) but the days of an organized torpedo attack on an enemy fleet were gone. It was also becoming apparent that rapid-fire guns were developing to a point where destroyers closing to torpedo-attack ranges would be shot apart before getting to fire their torpedoes. The early 1950s had seen the Japanese develop a new gun, the Model 13 3.9 inch L75 that had a rate of fire in excess of 35 rounds per minute. This gun quickly replaced the older 3.9 inch L65 and the Agano/Tenryu/Mutsuki class destroyers all were rearmed with it.
Another thing was becoming apparent by the mid-1950s was that the primary threat to any fleet was no longer a surface action at all but air and submarine attack. Air attack was to be conducted by long-range anti-ship missiles and carrier-borne aircraft; submarine attacks by the new generations of fast diesel-electric (and, although the Japanese didn't yet know it, nuclear-powered) submarines. Ships had to be able to launch and defend against those threats and the Japanese fleet was badly placed in both categories.
The Japanese response to this change was mixed and very much confused. The older generations of officers had grave problems in absorbing the changes; it is highly significant that their primary response was to equip the 18 inch guns on the four remaining battleships with nuclear shells. Younger or more far-sighted officers realized the implications. Destroyers were changing from attack ships to screening ships. They had to be able to defend the platforms for air and missile strikes against air and submarine attacks. The old A/B/C type destroyers were incapable of modernization to this new role, they would have to be replaced. The 36 very large destroyers of the Agano/Tenryu/Mutsuki class could be rebuilt to fulfill the new roles. Accordingly, between 1955 and 1959, all these ships were taken in and rebuilt.
The first consideration was anti-submarine capability. In the mid-1940s, the Japanese had developed a new class of diesel-electric submarine with high underwater endurance and performance. Although overshadowed in the public mind by the German Type XXI, the new Japanese Ha-300 class submarines were actually superior to the German design in many respects. It was experience with these submarines that gave the Japanese a full insight into the problems they faced. Fortunately, they also had a solution. In 1940, the Japanese Army had taken to the autogiro as a solution to its artillery observation needs and put the Kayaba Ka-1 into production. This turned out to be a very useful aircraft and was quickly taken up by the Navy for shipboard use as the V1Y-1. An early role was anti-submarine operations and tactics developed using V1Y-1 autogyros in pairs to hunt for submarines. The Japanese Navy quickly became a strong proponent of the shipboard use of helicopters and, by the early 1950s was probably a world leader in the integration of armed helicopters into the operations of surface warships.
During this time, the crude, simple and low-capability Ka-1/V1Y-1 autogyro had evolved into a family of compound helicopters, using engines for both forward flight and to power the rotor. They offered the prospect of being a capable and efficient ASW tool that could be deployed from the modernized destroyers. Accordingly, plans were drawn up for a radical rebuild of all the existing ships. This stripped them of their aft guns and all their torpedo tubes and replaced them with a capacious hangar capable of accommodating three V4Y-2 helicopters and a flight deck large enough to guarantee operations in bad weather.
Air defense was another problem entirely. Heavy rapid-fire guns were still quite effective against aircraft but their obsolescence was on the horizon. Light guns were already obsolete and, accordingly, the modification program, saw the triple 25mms finally vanishing from the Japanese fleet. The Japanese had, however, been active in the development of new air defense missiles. In the Navy's case, they had produced the Nodachi, a semi-active radar homer with quite acceptable range and operating altitudes by mid-1950s standards. The Nodachi differed from American and Australian anti-aircraft missiles in a key respect. The ammunition magazines on the American and Australian systems were based on experience with gun magazines; the Japanese based their magazines on their experience with torpedo reloading equipment. The missiles were delivered to the ship, sealed in a transport/launch box that was stored in a horizontal magazine. To reload the launcher, it retracted into the hull until the upper surface of its rails were flush with the deck. Two missile boxes were then run out of the magazines and along tramlines built into the deck until they slid onto the launch rails. The launcher then elevated to where the lower surfaces of the launch rails were correctly positioned and two more missile boxes attached to their lower surfaces. The launcher would then elevate and fire.
This loading system was clumsy, used volume very inefficiently and required crew to manhandle the missiles on an exposed deck but it had two major advantages. One was that it was small and all the components were above-deck; it could be installed on a warship without gutting her hull below the main deck. The other was that it required relatively little in the way of elaborate handling and maintenance. That made it easy to install in a modified (as distinct from a purpose-built) hull and suitable for destroyer deployment. The modification program positioned the missile launcher aft with 16 rounds being carried under the flight deck.
The first ships to be completed to this new design were the last four Mutsuki class destroyers. These had been suspended and were now re-ordered to the modified design. They become known as the Kawari class. As the older ships went in for conversion they emerged as members of that class and, by 1959, the Kawari class numbered no less than 40 ships.
Under the Japanese Navy's Strategic Review of 1959-61, there was little role for destroyers other than as screening ships and the fleet of 40 Kawari class ships was seen as being adequate for that purpose. Accordingly, no new construction was planned since the Kawaris were deemed adequate for their role. Their numbers slowly shrank over the years as attrition wore down them down. The four old light cruisers went first, one was sunk during the Pescadores Incident with another being written off as a constructive total loss. By the late 1970s, it was perceived that their replacement was far overdue but, by that time, Chipan's economic condition and the ever-increasing demands of the Army meant that any building plans were a triumph of optimism over common sense. No concrete plans for replacement ships were ever built and the last Kawari class destroyers soldiered on until they were finally scrapped in the early 1990s.