“We’ll continue to make steady and determined efforts to move ahead with negotiations,” Noda said, stressing the need to sign a peace treaty with Russia.

The four islands – which Russia calls the Southern Kurils and Japan calls the Northern Territories – has been the subject of a territorial dispute between the two nations since the end of World War II. Because of it, the countries have also not yet signed a peace treaty to end the war.

Last year, Russian President Dmitry Medvedev sparked a diplomatic row with Tokyo by making the first ever visit by a Russian leader to the islands. He later said Russia would increase its military presence there.

Japan’s then prime minister Naoto Kan called Medvedev’s visit an “inexcusable rudeness.”

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The Foreign Ministry said Friday the recent activity had taken place within Chinese-controlled waters and was completely normal. A ministry statement said China was strongly dissatisfied with recent comments from Japanese officials.

Japan’s chief Cabinet secretary on Wednesday said Japan protested to China after a flare was seen a day earlier at a Chinese structure at an undersea gas deposit.

The deposit, known as Kashi in Japan and Tianwaitian in China, sits near a median line in the countries’ overlapping exclusive economic zones.

Japan and China agreed in 2008 to suspend unilateral exploration in that field while continuing talks.

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Experts said the incident, which follows smaller leaks last weekend, is not a big setback to getting the plant under control but the timing is awkward for the government as it strives to win public acceptance for the restart of reactors elsewhere to avoid a summer power crunch.

The Fukushima Daiichi plant, on the coast 240 km northeast of Tokyo, was wrecked by the March 11 earthquake and tsunami, triggering reactor meltdowns and radiation leaks that caused mass evacuations and widespread contamination.

The leak discovered late on Tuesday was from a pipe at the plant’s No.4 reactor that may have burst after freezing due to cold weather, said a spokesman for the utility, known as Tepco. He said leaking water would go into a drain leading to a storage facility.

It contained only a tiny amount of radiation compared with the huge amount of water used to cool the reactors in the aftermath of the March disaster, much of which is still being treated at the plant to lower its radiation level, he said.

The No.4 reactor was shut for maintenance when the tsunami struck, and no fuel rods are inside thereactor vessel.

“I wouldn’t say this is a positive development. But it isn’t something that would further stoke safety concerns over other nuclear plants,” said Kenji Sumita, honorary professor at Osaka University.

“If it hadn’t been for the Fukushima disaster, an incident like this could have gone unreported.”

Shattered trust in the safety of nuclear energy has prevented the restart of reactors shut for routine maintenance, straining power supply and threatening blackouts. Only three of Japan’s 54 nuclear reactors are now operating. Without approval for restarts, all of them could be shut by the end of April, boosting the use of fossil fuels and adding over $30 billion a year to the nation’s energy costs, a government estimate said.

U.N. nuclear experts gave their backing on Tuesday to stress tests aimed at showing Japan’s nuclear plants can withstand the sort of disasters that devastated Fukushima Daiichi.

The government announced on December 16 that reactors at the plant had reached a state of cold shutdown, a milestone in cleanup efforts and a pre-condition for allowing about 80,000 residents evacuated from a 20-km (12 miles) radius of the Daiichi plant to return home.

Resource-poor Japan had aimed to increase the share of nuclear power to more than half of its electricity supply by 2030 before the disaster, but now looks to reduce its reliance on nuclear power and raise the role renewable sources such as wind and solar power.

Tepco initially estimated the size of this week’s leak at six litres but later revised it to 8.5 cubic metres, and is looking into how it can prevent similar incidents.

It follows the discovery and plugging of smaller leaks at the same reactor last weekend.

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Japan’s national broadcaster NHK cited Lavrov on Sunday as saying that the fate of the disputed Kuril islands in the Pacific Ocean should be decided in a national referendum.

“It is a blatant distortion of the minister’s words,” a source in the Russian delegation accompanying Lavrov on his Asia-Pacific tour said. “We regard such interpretations as provocation.”

“No politician in his right mind would ever put this issue for a referendum,” the source said.

The row over the South Kuril Islands, which are known as the Northern Territories in Japan, has prevented the two countries from signing a formal peace treaty since the end of World War II.

Russia has repeatedly stated that its sovereignty over the four islands, annexed by the Soviet Union after the war, has indisputable international and legal foundations.

The long-standing territorial dispute escalated in November 2010 following a visit by Russian President Dmitry Medvedev to one of the islands. Japanese authorities called Medvedev’s trip “inexcusable rudeness,” sparking an angry reaction from the Kremlin.

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TonenGeneral Sekiyu will buy 99 percent of the shares of Exxon Mobil Yugen Kaisha, which refines and sells fuel and lubricants, the Japanese refiner said about the deal, announced Sunday. Exxon Mobil’s stake in TonenGeneral will drop to 22 percent from 50 percent.

Large oil and gas companies have been shedding refining operations in recent years and turning to oil exploration and production in the hope of bigger profits. Tighter rules for car and truck fuel efficiency are expected to weigh on growth in demand for fuel in developed countries for years to come.

Sherman Glass, president of ExxonMobil Refining, told a press conference Monday in Tokyo that it was a restructuring move amid a changing global energy market, but said the company remained “very committed” to its refining — or downstream — operations.d

“What we continue to do is try to restructure — in some cases invest, in some cases divest and in some cases restructure — to make it a strong group of operations in our downstream” business, Glass told reporters.

The companies plan to conclude the deal in June.

Exxon, the world’s largest publicly traded oil and gas company, has a “long-term strategy of moving away from refining, where the margins are wafer thin, and into exploration,” said Nicholas Smith, a strategist at CLSA Asia-Pacific Markets in Tokyo. “Refining is something that anybody can do. You can buy the technology off the shelf.”

TonenGeneral said the move would make it more flexible, efficient and competitive in a market where demand is declining as the population ages and shrinks.

“The Japanese market is getting tougher,” said Jun Mutoh, the company’s managing director. “The decision-making within the company will be more effective in the newly integrated production-distribution operation.”

TonenGeneral will continue to deliver products and services under the Esso, Mobil and General brands and continue to rely on Exxon’s technology and technological support in the refining and petrochemicals businesses.

Other major oil companies are making similar moves.

Marathon Oil spun off its refining operations last July. This summer ConocoPhillips also plans to split itself in two, separating its refining operations from its more profitable oil and gas exploration and production business. BP and Shell are selling refineries in the U.S. and Western Europe.

Exploring and producing oil and gas offers investors a chance for faster growth. Also, oil prices are high and are expected to remain so, which has helped producer profits and funded a boom in new exploration.

Glass also said Exxon would like to develop Japan as a market for natural gas, another key part of Exxon’s business, but said exporting it from the U.S. would be “problematic” and that shipping it from Australia or the Middle East would be more likely options.

He cited the company’s 2010 acquisition of XTO Energy for its expertise in shale gas and fracking, a drilling method that is used to free oil and gas from rock, as an example of investment in the business.

“We are taking advantage of their expertise to bring additional gas to the market in a number of places around the world,” he said. “We do believe that Japan is a promising market that we’d like to develop for LNG,” or liquefied natural gas.

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The news came as an International Atomic Energy Agency (IAEA) team of experts began examining Japan’s safety checks on idled nuclear reactors.

Tokyo wants an international seal of approval for the energy-hungry country’s nuclear industry to bolster its faltering efforts at reassuring the public it is safe to resume atomic operations.

The vast majority of Japan’s 54 commercial nuclear reactors are offline because popular opposition is preventing their being restarted in the wake of the Fukushima nuclear crisis.

The disaster, triggered by the March earthquake and tsunami, contaminated the environment and forced tens of thousands of residents around the Fukushima nuclear site, in northeast Japan, to evacuate their homes.

Many still do not know if or when they will be able to return.

Utility companies say Japan will experience severe power shortages if nuclear electricity production is not re-started.

“We are making contact with the International Atomic Energy Agency to see what’s possible after we received requests from Fukushima that it hoped IAEA will have a permanent presence in the area,” a Japanese diplomat told AFP, under the customary condition of anonymity.

Foreign Minister Koichiro Gemba, whose parliamentary constituency is in Fukushima, told residents on Sunday that he was making the push after requests from local leaders.

“We are calling on IAEA Director-General Yukiya Amano for the international agency’s constant presence,” he said in a speech, according to Jiji Press.

The announcement coincided with a visit by a 10-member team of experts, led by James Lyons, IAEA director of nuclear installation safety.

At the request of the Japanese government, Lyons’ team will review Japan’s “stress test” before Tokyo approves nuclear reactor re-starts.

The Vienna-based IAEA has offices around the world — including in Tokyo — but it does not normally have permanent bases to monitor commercial reactor sites.

The Tokyo government has struggled with public trust on the nuclear issue since the March disaster.

That drive appeared to have suffered a further setback on Monday when it was revealed the body set up to manage Japan’s unfolding atomic catastrophe at Fukushima kept no records of its meetings.

The government’s nuclear disaster task force, headed by then prime minister Naoto Kan and including all of his ministers, has no minutes of the meetings that approved the evacuation of people living near the exploding reactors.

The Cabinet Office, in charge of keeping all public records, said it has told the agency to study what it can do to create a written record of the decision-making processes.

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The small fire was apparently caused by a cigarette lighter — although the airline said it has not yet identified who it belonged to, according to the Kyodo News and Jiji Press news agencies.

The Boeing 777, carrying 260 passengers and crew members, took off from Narita airport near Tokyo on Saturday evening but turned back shortly after takeoff.

No one was injured in the incident but passengers were forced to stay in Japan overnight, the reports said. The airline was not immediately available for confirmation.

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Polls published Sunday showed support for Noda and his new Cabinet was flat to slightly down from before Friday’s reshuffle.

The approval rating in the Nikkei business daily poll was 37 percent, up one-tenth a percentage pointfrom December, with disapproval unchanged. The Yomiuri and the Asahi said approvals dipped — 5 points to 37 percent and 2 points to 29 percent respectively.

Noda’s numbers have declined since he took office in September.

The majority of respondents opposed his tax hike plan.

Each poll telephoned about 1,000 eligible voters Jan. 13-14. Polls that size would have a 5 percentage point margin of error.

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Japan’s debt is more than twice its gross domestic product, higher than any of the struggling European economies whose fiscal problems have set off a eurozone crisis that has reverberated in markets around the world. Japan’s credit rating was downgraded last year, and Prime Minister Yoshihiko Noda said it could be further harmed if the country is seen as dragging its feet on reforms.

Noda commented during a live TV talk show following ratings agency Standard & Poor’s downgrade of nine European countries, including France, one of the strongest economies in the eurozone.

“Even France got its credit ratings changed,” Noda said. “We’ll be in a spotlight if Japan makes an impression that we are dwelling on the current fiscal policy and just let it slide. We must tackle the problems with considerable sense of crisis.”

The rating agency ended France and Austria’s triple-A status Friday. It lowered Italy’s and Spain’s by two notches and did the same for Portugal and Cyprus. S&P also cut ratings on Malta, Slovakia and Slovenia. France’s downgrade to AA+ lowers it to the level of U.S. long-term debt, which S&P downgraded last summer.

Noda, who took office in September, reshuffled his Cabinet on Friday in a bid to win cooperation from the opposition and voters to raise the sales tax and rein in the bulging fiscal deficit. He namedKatsuya Okada, a former foreign minister, as deputy prime minister to spearhead the efforts.

Noda says Japan urgently needs to reduce its debt burden as the nation ages and its labor force shrinks, putting a greater burden on the social security and tax systems. He has promised to submit a bill by the end of March to raise the 5 percent sales tax in two stages, to 8 percent in 2014 and to 10 percent by 2015.

The plan is unpopular not only among the public and in the divided parliament, but within Noda’s own Democratic party. Powerbroker Ichiro Ozawa and his supporters arguing that raising taxes would hurt the already weak economy.

Noda’s public approval ratings have continuously slid since he took office. The latest figure now stands below 40 percent amid resistance to raising the sales tax and a general lack of confidence in political leadership in Japan, which has seen a new prime minister every year for the past six years.

Noda said Saturday the measures are needed to keep Japan alive, and that he must seek the public’s understanding to “share the pain.”

“I will stake my political life to save and protect this country for future generations,” he said.

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Hajime “Jim” Sagawa ran a U.S. investment firm that earned a massive $687 million fee for advising Olympus in a 2008 acquisition deal that ranks as the largest advisory payment in history.

Olympus has admitted the deal along with others was part of a 13-year scheme to cover up $1.7 billion in losses in an accounting fraud that has caused the company’s stock market value to drop around 40 percent since October.

The scandal, involving inflated advisory fees and prices in acquisition deals, has triggered investigations by law enforcement agencies in the United States, Japan and Britain.

An outside investigation commissioned by Olympus found the scheme was hatched by several key executives and aimed to hide losses from investors, but law-enforcement agencies are continuing their investigations.

The whereabouts of Sagawa, a former PaineWebber banker, were unknown until Reuters located him when he attended the divorce hearing in a state court in Delray Beach, Florida.

When asked about the Olympus case, he responded with a terse “no comment.” Pressed further, he waved his hand and said “it’s rude” to keep asking.

Dressed in a blue sport coat and gray slacks, Sagawa emerged with his ex-wife from a courtroom after a final divorce hearing.

The couple walked briskly to a parking garage after being asked again to comment on the scandal that has rocked Olympus and left the Japanese medical equipment and camera maker in need of a capital infusion and at risk of being delisted from the Tokyo Stock Exchange.

Sagawa ran the Axes America brokerage firm involved in Olympus’ $2 billion takeover of British medical instruments company Gyrus.

The Gyrus fee was among several vehicles used by Olympus to disguise securities losses.

Axes America later allocated a large share of its $687 million advisory fee payment to Cayman-based AXAM Investments. That company was later struck off a company registry in the Cayman Islands.

Axes is also linked to another Japanese banker, Akio Nakagawa, whom Reuters located in Hong Kong in late November after he went on the run when the scandal was uncovered. He also declined to comment.

Olympus is suing its current president and 18 other past and present company officials over the scandal.

Until reports of the fraud emerged, Sagawa lived in a luxury waterfront house in Boca Raton, Florida, but was unable to be located afterward.

His ex-wife has repeatedly defended his involvement with Olympus and said she did not know where he was.

Sagawa has not responded to repeated emails and phone calls seeking more detail on Axes America’s role in the scandal.

The Sagawas filed for divorce in October, days after the Olympus accounting fraud surfaced when the company’s former chief executive, Michael Woodford, blew the whistle on the Axes Americaadvisory fee and other deals.

In a divorce petition filed in October, the Sagawas, who married in 1979 in Tokyo, cited “irreconcilable differences.”

The couple listed more than $11 million in combined assets and Sagawa reported a monthly income of $2,500 with $1,800 coming from social security and $700 from interest and dividend payments.

According to their settlement agreement, Ellen Sagawa will receive nearly $9.9 million in assets, including their Boca Raton home valued at $2.5 million. Also among the assets are $6.7 million held in a savings account.

Sagawa will keep nearly $1.5 million in assets that include $1.3 million in several retirement plans, $100,000 in a savings account and $100,000 in a brokerage account.

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