<P> Both countries worked closely to fulfill the United States promise, under Article 3 of the peace treaty, to return all Japanese territories acquired by the United States in war . In June 1968, the United States returned the Bonin Islands (including Iwo Jima) to Japanese administration control . In 1969, the Okinawa reversion issue and Japan's security ties with the United States became the focal points of partisan political campaigns . The situation calmed considerably when Prime Minister Sato Eisaku visited Washington in November 1969, and in a joint communiqué signed by him and President Richard Nixon, announced the United States agreement to return Okinawa to Japan in 1972 . In June 1971, after eighteen months of negotiations, the two countries signed an agreement providing for the return of Okinawa to Japan in 1972 . </P> <P> The Japanese government's firm and voluntary endorsement of the security treaty and the settlement of the Okinawa reversion question meant that two major political issues in Japan--United States relations were eliminated . But new issues arose . In July 1971, the Japanese government was surprised by Nixon's dramatic announcement of his forthcoming visit to the People's Republic of China . Many Japanese were chagrined by the failure of the United States to consult in advance with Japan before making such a fundamental change in foreign policy . The following month, the government was again surprised to learn that, without prior consultation, the United States had imposed a 10 percent surcharge on imports, a decision certain to hinder Japan's exports to the United States . Relations between Tokyo and Washington were further strained by the monetary crisis involving the December 1971 revaluation of the Japanese yen . </P> <P> These events of 1971 marked the beginning of a new stage in relations, a period of adjustment to a changing world situation that was not without episodes of strain in both political and economic spheres, although the basic relationship remained close . The political issues between the two countries were essentially security - related and derived from efforts by the United States to induce Japan to contribute more to its own defense and to regional security . The economic issues tended to stem from the ever - widening United States trade and payments deficits with Japan, which began in 1965 when Japan reversed its imbalance in trade with the United States and, for the first time, achieved an export surplus . </P> <P> Heavy American military spending in the Korean War (1950--53) and the Vietnam War (1965--73) provided a major stimulus to the Japanese economy . </P>

Which event changed how the united states approached the japanese economy