Boost for economy in Russian Far East from Japan, but no solution to Kuril Islands dispute

The two leaders finalised 80 agreements on economic, cultural, science and sports cooperation, and talks will take place on joint economic development of the four islands over which Japan claims sovereignty.

As many as 68 of the deals are on commercial matters. 

However, Russia refused to budge on ceding the islands, the subject of a dispute which has prevented the signing of a peace treaty to formally end hostilities in the Second World War. 

'It would be naive to think we can solve this problem in an hour,' said Putin at a joint press conference with Abe. 'But it is undoubtedly necessary to look for a solution.'

Abe said: 'Concluding a peace treaty that has not been concluded in more than 70 years is not easy. I think we as the two leaders were able to show our sincere determination toward signing a peace treaty, although there lies a difficult path ahead.'

The improved economic relations are seen as paving the way for further discussions on the islands, although few analysts believe Putin will give up sovereignty, yet he said during his two day trip: 'I believe, from a long-term prospect, that we could achieve a historic resolution.'

'The issue won't be solved if each of us just make their own case,' said Abe.

'We need to make efforts toward a breakthrough so that we don't disappoint the next generation. We need to set aside the past and create a win-win solution for both of us.'

Putin made clear he believes that 'joint work in economic areas will help to establish the basis needed to move to a relationship of true partnership'. He agreed to work towards easier visits for older Japanese who used to live on the islands which are known in Tokyo as the Northern Territories. 

The two countries plan to cooperate on development of natural gas and coal infrastructure, nuclear energy, agriculture, medical services and other areas.

The Russian Direct Investment Fund (RDIF) and the Japan Bank for International Cooperation (JBIC) will create a joint Russian-Japanese investment fund worth $1 billion, it was announced.

RDIF CEO Kirill Dmitriev said the new fund will play a key role in financing joint Russian-Japanese investment projects in the spheres of infrastructure and agriculture, among others.

'We are currently discussing over 20 projects, the first of which we plan to implement in the coming six months,' he said. The aim is to pull around $10 billion into the Russian economy. 

The Russian president made clear the agreements with Japan will be important to the development of the Russian Far East.

'Russia and Japan haven't had very much economic cooperation,' said Putin. 'It is necessary to expand the potential of our economic ties.'

Measures to ease travel between the two countries for business visitors were also agreed. The summit began in the hot spring resort of Nagato before moving to Tokyo.