Following for your Prime Minister. 
FAR EAST. My immediately preceding telegram. 
1. We have received from source which we cannot ignore but whose reliability we cannot assess, a report that Japanese expeditionary force of 12 to 15 divisions is now in Formosa and Hainan with transports standing by. Alleged plan is for direct attack on Singapore synchronizing with blocking up the Suez Canal by German action which is said to be imminent.
This would be designed as a surprise attack in force on Malaya and without a preliminary attempt to seize bases in Indo China which might act as a warning to United States.
2. We think report exaggerates the number of Japanese troops in Hainan and Formosa and that direct attack on Malaya without seizure of intermediate bases at Camranh Bay and Bangkok is unlikely. Securing of these bases might well however coincide with landing of forces to secure advanced bases in Kra Peninsula and Japanese military infiltration into Thailand which has already taken place would facilitate attack on Malaya.
3. Report may moreover be part of Axis war of nerves. Any marked German successes in Europe or Africa are however likely to encourage sudden Japanese move southward and Japanese have made all military preparation for this.
4. Whatever conclusion of Soviet Japanese pact may signify, we feel only safe course is to regard it as prelude to further southward move by Japan.