NATIONAL INTELLIGENCE ESTIMATE NIE 41-65; JAPAN

Created: 11/26/1965

OCR scan of the original document, errors are possible

DVCON5

GPOcTROlLED DISSEM

national intelligence estimate

JAPAN

Sato's Political Position The Domestic Economy Foreign Economic Situations Military Prospects Foreign Policy

NOTE: This is an advance copy of the conclusions of this eshmate as approved by the United States Intelligence Board. Tho(ext will be circulated within five days of this issuance.

Central Intelligence Agency

DISSEM

FORPflEASE DATE:0

CEHTRAL IHTELLIGEBCS AGESCY

5

SUBJECT: JAPAil

THE PROBLEM

To estimate the political, economic, and foreign policy prospects for Japan over the next two or three yearn.

corcciusxoHs

A. Prime Mlnlater Sato's position Is probably secure for the period of this estimate, it la unlikely that his conservative majority will shrink significantly In the next lover house elections, vhlch will probably be held Tbe major threat to his position Is the current business slowdown, but we believe that his administration's fiscal measures and tbe basic strengths of the economy vill prevent further deterioration andodest recoveryear or so.

downgrading andf 1cat ion

FOIMLfASE DATE:I

xcluded from autoontic

B* Another major problem for Sato Is hla identification with generally unpopular US policies la Vietnam. If extremists who now lead the opposition Socialist Party succeed in exploiting the issue to mount mass deaonstrations on the scale of thoseato might be forced to resign in favor of another, less Identifiable pro-US conservative leader. On balance, however, we belle-re thatt 1sts viU not succeed ln reccvlcg Sato with these tactics under foreseeable circumstances.

conflicts between Japan and the US will remain,has so far caused or Is lilcely to cause any seriousenerally friendly relationship, or jeopardise theof tbe Sato adnlr 1st ration. The main prcblsms Inwith the US will continue to be those of Communistand Okinawa. Japanese trade with Paying will ccstlr.ue tothoughess spectacular rate than in recent months. Inwill probably extend credit guarantees to cover exports to He will seek to avoid diplomatic reccgnitlcn cf Peking as long

ad possible; but if Peking gained significant further international recognition, be wculd probably follow suit, hoping that any Impairment of Japan's relationship with Taiwan would be temporary.

will continue tc rely on the Security Treaty with themilitary protection. While some qualitative improvement is inis little chance that Sato will press for any major incre-isssown defense forces over the next two or three years. He will

APPRQVtQ FOR REIEASI

remain sensitive to public concern* on Vietnam and will continue touse of Olinawan bases forparticularly on

Sorth Vietnam. Werowth of Japanese nationalism and self-assurance, which will be reflectedomewhat more independent policy toward the US on these and other issues, andore active political role in general in East Asia.

E, Nonetheless, Japan's initiatives in foreign affairs are apt to be cautious and pragmatic, designed to further its efforts to expand trade in as marry directions as possible. Willingness to support plans for develcroment of Southeast Asia will be similarly conditioned; Japan is not prepared to accept US direction on Its economic assistance role in the area.

aPPIOVID FOMUEASfilli

Original document.

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