The Japanese-flagged general cargo ships 'Sensho Maru' and 'Sumiho Maru', both 499-ton vessels, collided about 12 km off Cape Inubosaki in Chiba Prefecture at around 2:10 a.m.
The 'Sensho Maru', carrying about 1,300 tons of steel from Ibaraki Prefecture to Osaka Prefecture, sank as a result of the collision, local media reported.
The captain of the Sensho Maru, was rescued, but two crewmen are still missing, authorities informed.
A special rescue team discovered the sunken ship lying on the seabed, where they found one of the ship’s crew members deceased.
All four crew members aboard the Sumiho Maru, based in Kure, Hiroshima Prefecture, were safe, according to the Japanese coast guard. That ship later returned to Kashima port.
The exact cause of the incident is yet to be determined, although initial reports say visibility was poor due to fog.
A search and rescue effort is underway by five coast guard patrol vessels, a helicopter and a special SAR unit, in a bid to locate the missing men.
An oil spill was also confirmed at the scene and another special unit is working to contain the leak.