(2) Timor. My telegram No. 50.  On 18th January the Netherlands Minister in London  approached the Far Eastern Department of the Foreign Office and said that his Government had recently heard of renewed Japanese activity regarding Timor. He suggested in very general terms the possibility of co-operation between the Netherlands and Australia for the development of Portuguese Timor.
He mentioned the possible institution of airlines. While this approach is welcome here as an indication of co-operation of British and Dutch interests in the Far East, it was assumed that, as the matter is of primary interest to Australia, no kind of reply could be made until the Commonwealth had been consulted.
Dominions Office are now forwarding you by air mail despatch giving full report of the interview. 
(3) According to a secret but entirely trustworthy source, on 22nd January, the Japanese Minister for Foreign Affairs  communicated with the Japanese Minister at Lisbon.  Mr. Arita stated that he considered 'essential that we should bring indirect pressure and persuasion to bear on the Portuguese to offset the following three factors:
(a) suspicion of Japan;
(b) new appointment of Luis  to S.A.P.T. group;
(c) British coercion and activities'.
He instructed the Minister at Lisbon, in view of internal conditions in Portugal, to concentrate on the Prime Minister  himself in negotiations from now on, and told him to emphasise the following points:
(a) Apart from Japan's present need for oil, Portuguese interests will be given every consideration and Japan's intentions from first to last are economic and peaceful in nature.
(b) Japanese do not object in connexion with oil to any other company, apart from S.A.P.T., which Portugal may see fit to choose.
(c) Make use of the excuse that Japan, in pressing her just demands, really has it in mind to free Portugal of unwelcome pressure and activities of Great Britain.
Japanese Minister for Foreign Affairs also referred to the despatch of one Yanagimawa to Macao, 'which should give Portugal a good idea of the sincerity of our intentions and enable us to understand their attitude more fully'.
He also states that pending change the Governor-General in Timor  is to be exploited by the Japanese to approach the new appointee and other personages of influence.