OSAKA, Nov. 26 (Kyodo) — Kubota Corp. said Monday it will set up a factory in eastern China to produce diesel engines for agricultural machinery as it looks to bolster its business in the growing Asian market.

The Japanese machinery maker said it will set up the factory operating company in January, and start mass-production in Wuxi, Jiangsu province, in July 2014, investing about 4.3 billion yen.

Expanding overseas output will reduce production costs and curb risks from the yen's appreciation, it added.

Kubota initially plans to produce engines for combine harvesters and other vehicles that it manufactures in China and sells under its own brand name, and in mid-2015 will start selling the product to other makers of construction equipment and forklifts.

Kubota plans to produce 97,000 diesel engines annually by around 2018.