Japan's Prime Minister Naoto Kan, struggling with a divided parliament and a fragile economy and now under fire for what critics call his mishandling of a similar row with China, got a fresh headache on Monday when Russian President Dmitry Medvedev visited one of four islands that both nations claim.
China told the United States on Tuesday to stay out of its row with Japan, saying it was strictly a bilateral affair.
Critics in Kan's own party as well as the opposition accuse Kan of caving in to Chinese demands by allowing the release of the captain, and it is one reason his support ratings have sunk to around 40 percent after just five months in office.
The dispute between Tokyo and Moscow concerns four islands off northern Japan that were occupied by troops of the former Soviet Union at the end of World War Two.
Tokyo's demands for the return of the islands, which stretch from northeast of Japan's main northern island of Hokkaido to Russia's Kamchatka Peninsula, have weighed on relations with Moscow ever since, preventing the signing of a peace treaty.
Japanese Economic Minister Banri Kaieda expressed worries that the Japan-Russia row could affect economic ties, but economists saw no substantial economic impact.
"Japan and Russia have deep ties when it comes to energy and natural resources development," Kaieda told reporters after a cabinet meeting. "I'm worried about the impact on economic relations from the Russian president's visit to the Northern Territories."
Japan's trade flows with Russia are relatively small compared to those with China, which became Japan's biggest trade partner last year.
Japan's exports to Russia in 2009 were equivalent to about 2 percent of its exports to China. Its imports from Russia accounted for 1.6 percent of Japan's total imports.
"Japan imports liquefied gas, but that can be imported from elsewhere, as can oil. This is not an EU-Russia situation so the impact is very limited," said Martin Schulz, a senior economist at Fujitsu Research Institute.
Adding to Kan's diplomatic headaches, Russia's Medvedev on Monday visited an island outpost claimed by Moscow and Tokyo, reigniting a row with Japan, which demands their return.
But leaders from Japan and Russia will likely hold talks at an summit of Asia-Pacific Economic Cooperation (APEC) on Nov. 13-14, Japan's top government spokesman said, adding Tokyo was considering what steps it might take after lodging a protest with the Russian envoy to Tokyo on Monday.
Russian Foreign Minister Sergei Lavrov on Monday called the Japanese reaction "unacceptable", but U.S. State Department spokesman P.J. Crowley weighed in on Japan's side.
"We do back Japan regarding the Northern Territories. But this is why the United States for a number of years has encouraged Japan and Russia to negotiate an actual peace treaty regarding these and other issues," Crowley said.
JAPAN-CHINA ROW: BAD FOR BUSINESS
Strained relations between Japan and China have raised concerns about the fallout for business given deep economic ties between Asia's top two economies. But the two countries, both facing domestic pressure, seem no closer to resolving it.
U.S. Secretary of State Hillary Clinton last week urged both Beijing and Tokyo to be calm and offered to host trilateral talks to restore relations to an even keel.
"We believe such talks are in the interest of all three countries and we are confident that they would advance shared objectives," said a U.S. State Department official traveling with Clinton in Malaysia, speaking on condition he not be identified.
But on Tuesday, Chinese Foreign Ministry spokesman Ma Zhaoxu dismissed the proposal as "a U.S. idea", adding that it was "totally wrong" to include the disputed islands in any U.S.-Japan defence agreements.
"It must be pointed out that the Diaoyu islands are Chinese territory, and the dispute between China and Japan over them is one between the two countries," he said in a statement on the Foreign Ministry's website (www.mfa.gov.cn).
Sino-Japanese relations deteriorated sharply in September after Japan detained a Chinese trawler captain whose boat collided with Japanese patrol ships near the chain of disputed islands, called Senkaku in Japan and Diaoyu in China.