Putin Eyes Economic Ties, Nuclear Deal With Japan

Russian Prime Minister Vladimir Putin will meet Japanese Prime Minister Taro Aso on May 12.

TOKYO/MOSCOW (Reuters) -- Russia and Japan will sign an agreement on the civilian use of nuclear energy during Prime Minister Vladimir Putin's visit to Tokyo this week.

Putin told Japanese media the accord would increase the share of Russian nuclear fuel on the Japanese market to 25 percent from 15 percent.

He is also seeking Japanese investment in about 200 other projects, including automobile, energy, space, communications, and steel-manufacturing projects, the "Nikkei" business daily reported after an interview with Putin.

"We intend to sign a host of inter-governmental agreements. And I think representatives of business will come to sign significant contracts," Putin said, according to a transcript of the interview supplied by the Russian government.

"We have observed a rise in Japanese investment into the Russian economy," said Putin, who will meet Japanese Prime Minister Taro Aso on May 12.

Bilateral trade soared while Putin was president from 2000 to 2008, rising to $30 billion last year, as Japanese companies sought access to Russia's consumer market and energy projects.

Russia, which is now facing a recession after a decade-long boom, is seeking Japanese investment to develop its Far Eastern regions.

Big Japanese investors in Russia include carmaker Toyota Motor Corporation, which opened its first plant in Russia in 2007. Putin said Nissan Motor was also preparing to open a factory soon.

Russia sent its first cargo of liquefied natural gas (LNG) to Japan in March from the Pacific Sakhalin-2 project, which is controlled by Gazprom and includes Japan's Mitsubishi Corporation and Mitsui.

But ties with Tokyo have traditionally been soured by a dispute over several islands seized by the Soviet Army at the end of World War II.

The disputed islands -- known in Russia as the Southern Kuriles and in Japan as the Northern Territories -- lie amid rich fishing grounds near Russian oil and gas fields.

Japan wants the islands back and quotes a vague promise by a Soviet leader Nikita Khrushchev in 1956. Since then, all Kremlin leaders have said the islands will remain Russian.

"Our stance is to ensure the return of four islands and then seek a peace treaty," Japanese Foreign Minister Hirofumi Nakasone said. "This stance has remained unchanged."

There seemed little chance of a breakthrough on the dispute, which has prevented the two sides from signing a formal peace treaty ending World War II.