Obama faces strains in Japan, first stop in Asia

TOKYO (Reuters) - U.S. President Barack Obama arrived in Tokyo on Friday for a summit in which the two allies will seek to ease strained security ties as they adjust to a rising China, set to overtake Japan as the world's No.2 economy.

Tokyo is the first stop in a nine-day Asian tour that takes Obama to Singapore for an Asia-Pacific summit, to China for talks on climate change and trade imbalances, and to South Korea, where Pyongyang's nuclear ambitions will be in focus.

Washington's relations with Japanese Prime Minister Yukio Hatoyama's government, which has promised to oversee a diplomatic course less dependent on its long-time ally and forge closer ties with Asia, are frayed by a dispute over a U.S. military base.

Obama and Hatoyama, whose Democratic Party defeated its long-dominant rival in an August election, were expected to turn down the heat in the row over the U.S. Marines' Futenma air base on southern Okinawa island. The base is a key part of a realignment of the 47,000 U.S. troops in Japan.

"I want to make this a summit that shows the importance of Japan-U.S. relations in a global context," Hatoyama told reporters on Friday morning ahead of Obama's arrival.

Assuaging anxiety and beginning to define a new direction for the five-decade-old alliance will be a difficult task.

Hatoyama says he wants to begin a review of the security ties formalized in 1960 with the aim of broadening ties longer term and a senior U.S. official said Obama shared that desire.

"Both leaders, I predict, will focus on 2010, next year, and the 50th anniversary of the U.S.-Japan Mutual Cooperation and Security Treaty," a senior U.S. official, speaking on condition of anonymity, said before a smiling Obama was met by Foreign Minister Katsuya Okada at Haneda airport.

"Certainly, President Obama believes that it's an opportunity to update and adapt the alliance to face some of those new challenges that I mentioned, particularly of the global and the transnational sort."

DEEPER QUESTIONS

No breakthroughs were likely in the feud over Futenma during Obama's visit, although Hatoyama said on Thursday he would tell the U.S. leader that Japan wanted to resolve the issue soon.

U.S. officials have made clear they want Tokyo to implement a 2006 deal under which Futenma, located in a crowded part of Okinawa, would be closed and replaced with a facility in a remoter part of the island. Replacing Futenma is a prerequisite to shifting up to 8,000 Marines to the U.S. territory of Guam.

But Hatoyama said before the election that the base should be moved off Okinawa, fanning hopes of the island's residents, reluctant hosts to more than half the U.S. forces in Japan.

Entangled with the dispute are questions about reframing the alliance, given changing regional and global dynamics.

China is forecast to overtake Japan as the world's second-biggest economy as early as next year, raising concerns in Japan that Washington will cozy up to Beijing in a "Group of Two" (G2) and leave Tokyo out in the cold.

Obama will spend just 24 hours in the Japanese capital compared to three days in China, where he will discuss revaluing the yuan and encourage Chinese consumers to spend and to open Chinese markets further.

HATOYAMA UNFAZED BY CHINA RISE

Hatoyama said he was unworried by China's rise.

"It's natural when we consider the size of China's population. There's no need to feel pessimistic about it. Rather, I'm optimistic about Japan. We should run an economy that suits our size," he said in an interview with Channel NewsAsia.

"And even more than before, I want to create a Japan that's politically more outspoken, with our voice in an international environment," he added. "The Japan-U.S. alliance is no doubt a cornerstone of Japan's diplomacy -- there's no question about the need to maintain that."

Despite such assurances, some in Washington are worried by signs Japan is distancing itself from its closest ally by promoting an as yet ill-defined East Asian Community.

The two leaders were, however, expected to stress the positive, agreeing to cooperate in fighting global warming and promoting nuclear disarmament, while calling on North Korea to rejoin stalled six-party talks on its nuclear arms program.

"Pursuit of nuclear weapons and missile delivery systems makes North Korea and the region less secure, whereas negotiations in the six-party process to achieve the peaceful denuclearization of the Korean Peninsula can bring security and prosperity to North Korea and the region," Obama told South Korea's Yonhap news service.

North Korea raised tensions on Friday, warning the South it was ready for battle over a disputed sea border with a pledge to take "merciless military measures to defend" what it saw as the correct line. The two Koreas had their first naval firefight in seven years on Tuesday along the disputed sea border off their west coast, but there were no reported casualties.

(Additional reporting by Yoko Kubota; Editing by Ron Popeski)