Most observers blame domestic concerns for the lack of a peace treaty after more than 60 years; neither country’s leaders want to appear weak to their own constituents. But economic concerns could trump electoral calculations and national pride. With the closure of most of Japan’s nuclear power plants following the 2011 disaster, Japan has become the leading buyer of Russian natural gas. Closer ties would also benefit the two countries in their dealings with China and the Koreas. And both Russia and Japan would like to start developing the disputed territories, something that won’t likely happen without a demarcation.
Currently a lack of settlement is not preventing either state from pursuing their national economic goals. Economic ties between Russia and Japan have strengthened since the mid-2000s, despite worsening political relations between 2010 and 2012. Growing bilateral trade and investment removes a possible incentive for Moscow to offer territorial concessions and renders a settlement unlikely in the short term. In the long term, changing geopolitical dynamics in Northeast Asia — in particular a common interest in counterbalancing the influence of China — may offer a more promising route to resolution of the dispute.