Repeated to Washington No. 20 London No. 21.
Improvement of the attitude reported in my telegram No. 105  has been maintained and I find some of my colleagues who should be well informed believe in the truth for the time being of the Minister for Foreign Affairs'  assurances that Japan does not intend any offensive move south. She is no doubt intent on pushing her economic penetration of Indo-China and determined to secure from that source the adequate supply of rice which is essential to her. Above confirms doubts in my telegram No. 73  and confirms my belief that Japan will follow opportunist policy when she thinks safe but avoiding any move that might precipitate hostilities. It is possible of course that the extreme army elements might take precipitous action against the wishes of the Government.
Japan will of course be influenced by the course of events in Europe. Should we suffer reversals she will be prepared to move quickly. She is likely to be restrained by doubt as to United States reaction and the extent of the British preparedness.
Accordingly I urge continuance of present United States tactics and of our reinforcements. But as regards the latter I repeat advice in my telegram No. 95  regarding publicity. [I]  urge too that whilst adopting a firm attitude to Japan we should avoid anything in the nature of pin pricks or unnecessary provocation.