ANNEX. 1. The background to Japan's present policy of expansion southwards is:(a) her desire to dominate 'greater East Asia" for political, economic and strategic reasons; (b) the failure of her adventure in China which has now been publicly admitted by Prince Konoye. Events in Europe have now encouraged Japan to advance southwards In recent months moreover her relationship with Germany has undergone a change. We believe that Japan now considers that for Germany to lose the war would be a disaster for Japan, and that her partnership in the Axis has accordingly become increasingly intimate.