Repeated to Washington No. 13, London 13.
Situation. Since my telegram No. 62  press attacks on United States have continued until the last few days when there has been a lessening possibly in an attempt to create a better atmosphere for Nomura's  arrival. Statement of Dutch Minister  (telegram No. 68 ) brought series of threatening articles on Netherlands East Indies.
You have no doubt had from London Foreign Office appreciation of situation in Far East. Some who are in a position to know believe that something is brewing here and the United States Ambassador  tells me that after many conversations with the Minister for Foreign Affairs  he is firmly of the opinion that Japan is 'headed straight for war with United States'. He agreed that the state of the internal situation and economic conditions and the strain of war with China logically would lead to the contrary conclusion. Nevertheless he is of opinion that the extremist army element is not affected by these considerations and that it is resolved upon war with the United States in order to establish the proper position of Japan in the world. He said that the United States could not possibly allow Japan to dominate Singapore. I communicate these statements rather because his views will possibly be of assistance at Washington than because I think they can be completely justified.
Latest disquieting development is Japanese campaign against the Chinese on the Hong Kong borders, for which they seem to be landing unnecessarily large forces. On the other hand I have reports of increased tendency in certain official quarters here to meet both British and Americans in a friendly way. I took the opportunity of suggesting to the French Ambassador  and the Thai Minister  that Japan, acting for the first time in her history as a mediator , would probably seek some gain for herself out of what is already represented as a great diplomatic triumph. They appreciated the warning and said that they would be on their guard; both are personally very suspicious of the Japanese.
The border conference is attracting great attention and several newspapers contain almost identical articles making the following points:
Japan should use the conference:
(1) to secure undisputed position as leader of East Asia:
(2) to secure recognition of the policy of the mutual prosperity sphere:
(3) to exclude British and American influence:
(4) to develop race consciousness in the Straits Settlements and Netherlands East Indies:
(5) to give warning to the Netherlands East Indies of the danger of non-cooperation:
(6) generally to eliminate the White peril from Asia.
In spite of the circumstances of the situation set out in the Foreign Office appreciation, I have doubts whether any specific immediate co-operation with Germany is in view. I think that it is a conceded probability that consideration of any such move will await reports from Nomura in Washington and from Oshima - incidentally he has reached Berlin.
In the circumstances I can only watch and report developments and be ready for emergencies. (My telegram No. 59. ) I rely on you to keep the Chancery  fully informed from your end.