The eight who were rescued were transferred to the Reagan for medical evaluation.
The Reagan crew and Japanese forces were conducting search and rescue operations Wednesday afternoon (local time) and trying to recover the remaining crew and passengers.
"The Maritime Self-Defense Force is currently searching with US forces," Japanese Defence Minister Itsunori Onodera said, according to public broadcaster NHK. "We received information from US Forces that the cause is possibly engine malfunction."
Onodera voiced concern about the frequency of aircraft accidents involving US forces, saying he would ask the American military to take more care with safety. This was an apparent reference to last month's crash on Okinawa, when a transport helicopter caught fire during a training flight and crashed just 274m from houses. No one was injured.
The C-2 is a twin-engine cargo plane designed to transport people and supplies to and from aircraft carriers. It crashed 149km northwest of Okinotori island, about halfway between Okinawa and Guam, according to the Okinawa Defense Bureau.
The 7th Fleet has been carrying out exercises linked to the recent rise in tensions with North Korea. This month, for the first time in a decade, it carried out a three-carrier strike exercise in the sea between Japan and the Korean Peninsula - a show of force that North Korea has decried as warmongering.
The crash is the latest in a string of accidents to befall the 7th Fleet this year, including two collisions involving guided-missile destroyers that left 17 sailors dead.
Ten were killed when the USS John S. McCain collided with an oil tanker near Singapore in August, and seven died when the USS Fitzgerald ran into a much heavier container ship off the coast of Japan in June.
The month before, the guided-missile cruiser USS Lake Champlain collided with a South Korean fishing vessel off the Korean Peninsula and the guided-missile cruiser USS Antietam ran aground in Tokyo Bay in January.
Most recently, a Japanese tug lost propulsion and drifted into the USS Benfold, another guided-missile destroyer, during a towing exercise just last week. No one was injured on either vessel and Benfold suffered minimal damage, the 7th Fleet said.
The 7th Fleet has about 50 to 70 ships assigned to it and is responsible for an area that spans 36 maritime countries and 48 million square miles in the Pacific and Indian oceans, according to the Navy.
The admiral in charge was removed from his position after his commanders lost confidence in his ability to lead and the Navy's top admiral ordered a fleetwide review of seamanship and training in the Pacific after the McCain collision.
A survey of sailors on the USS Shiloh, a cruiser, released last month painted a damning picture of life in the 7th Fleet, where sailors say they are overworked and undertrained.
"I just pray we never have to shoot down a missile from North Korea," one sailor lamented, according to the Navy Times, "because then our ineffectiveness will really show."
The crew members described dysfunction from the top, suicidal thoughts, exhaustion, despair and concern that the Shiloh was being pushed to sail while vital repairs remained incomplete, the paper reported.
