TOKYO, Feb 17 (Reuters) - Japan's space agency on Saturday launched a second test model of its new flagship rocket H3, almost one year after the first failed due to engine ignition trouble.

The Japan Aerospace Exploration Agency (JAXA) and primary contractor Mitsubishi Heavy Industries plan for the H3 to replace the two-decade-old H-IIA rocket, hoping that its lower costs and greater payload capacity will help them win launch orders from global clients.

The rocket will fly for about two hours and then release two micro-satellites and a dummy mass simulating a satellite payload. JAXA will host a press conference later in the day to explain the mission's outcome. (Reporting by Kantaro Komiya; Editing by Edwina Gibbs)