Russia and Japan have a deeply contentious history, based mostly on territorial disputes. A chain of islands that runs between the Japanese mainland and Russia's Kamchatka Peninsula has been swapped back and forth over the past 128 years since Tokyo and Moscow established diplomatic relations. In 1855, Sakhalin Island and the Kuril Islands were split between the two sides. The Treaty of St. Petersburg in 1875 gave Japan control of all of the Kuril Islands in exchange for control of Sakhalin Island, but after the Russo-Japanese war in 1904-1905, Japan took the southern half of Sakhalin Island. During World War II, the Soviets occupied the islands and at the Yalta Summit in 1945 were granted possession of them. The Japanese people on the islands were expelled in 1947 and sent to Japan. Because Japan sees Russia as occupying its Northern Territories, or the Southern Kurils, Moscow and Tokyo never signed a formal peace treaty at the end of World War II. In addition, since the end of the war, Moscow has recognized that Japan is part of the United States' alliance network. All of this has led to relatively poor relations between Russia and Japan. Despite their proximity and economic size, trade between the two has been relatively small. In 2012, Russo-Japanese trade was $32 billion compared to Russia's $82 billion in trade with China. The one exception of large-scale cooperation between the two is the Sakhalin-2 liquefied natural gas complex, which Tokyo justifies participating in because the complex is located on one of the islands it previously possessed. Russia and Japan have held talks over the past two decades on increasing trade and strengthening political ties, though the dispute over the islands has been the primary obstacle to change. However, recent internal and external shifts in both countries have created an opportunity for Russo-Japanese relations to improve.
