After Ikeda resigned because of ill health, the Diet in November 1964 chose Sato as his successor. As prime minister Sato presided over the continued growth of the Japanese economy and the improvement of Japanese relations with other Asian countries. Although Sato increased Japanese trade with mainland China to some extent, China distrusted his policies toward Taiwan and his support of the United States cause in the Vietnam War. In 1969 Sato reached an agreement with U.S. President Richard M. Nixon for future return of the Ryukyu Islands to Japan, the removal of all nuclear weapons from the area, and the continued maintenance of the U.S.-Japanese Mutual Security Treaty. Sato came under heavy criticism for provisions in the agreement that allowed U.S. military forces to remain on Okinawa Island after its return to Japan.
In the early 1970s problems with the United States over Japan's huge
surplus in Japanese-U.S. trade put increased pressure on Sato. He attempted
to seek new Japanese markets in Europe and the Soviet Union, but his
unpopularity continued, especially after President Nixon visited China
in February 1972, preempting similar Japanese efforts. Sato resigned
in June 1972, shortly after the Ryukyus were officially returned to
Japan. He was unable to ensure the election of his chosen successor,
and his passing from the scene seemed to mark the end of the old guard
that had dominated Japanese politics since 1945.
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