Following for your Prime Minister. [1]

FAR EAST. My immediately preceding telegram. [2]

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.