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The two leaders will discuss on Tuesday ways to enhance ties in various fields including security, trade and explore the possibility of cooperation in civil nuclear energy.
Regional issues like situation in Afghanistan and international matters including climate change and reforms in the United Nations Security Council will also come up for discussions.
Hatoyama, who is on his first official visit after taking over in mid-September, was accompanied by his wife Miyuki Hatoyama at the dinner hosted by Singh and his wife Gursharan Kaur at their 7 Race Course Road residence.
Hatoyama is here to 'feel the pulse of the vibrant, fast emerging India personally,' Japanese Foreign Ministry spokesman Kazuo Kodama said, adding the visit is aimed at translating the India-Japan strategic and global partnership into more 'action-oriented' cooperation.
Kodama indicated that civil nuclear cooperation will be among the issues to be discussed during the summit talks. Japanese business community is keen to have civil nuclear cooperation with India but the policy of their government is preventing this.
Though Japan welcomes India's unilateral moratorium on nuclear tests, it 'hopes' that it will sign and ratify the Comprehensive Test Ban Treaty, Kodama said.
Asked whether the two leaders will deliberate on civil nuclear cooperation, Kodama said the issue is important in respect of climate change and 'will always be discussed.'
On hi-technology trade between the two countries, Kodama, also special spokesman for Hatoyama, said, "Japan believes that cooperation in hi-technology will not only be beneficial to India and Japan but also to the global community at large."
Noting that the export control regime in his country was very 'vigorous,' he said a bilateral consultative committee is already exchanging views on the issue and more information would be required by Japan before any decision is taken.
About Tuesday's meeting, he said the two leaders will also review the action plan prepared by officials on security cooperation agreement signed during Singh's visit last year to Japan.
To a question on the possibility of India getting Asia Pacific Economic Cooperation membership, he ruled it out for the moment saying that the membership has been frozen till next year.
On increasing cooperation between India and Japan at various areas particularly security, Kodama said it was not aimed against China or any other country.
With regard to climate change, he said Japan wants a fair and effective international legal framework to ensure cutting emissions with fixed targets for both long-term as well as mid-term levels.