Japan was set to release a Chinese fishing boat captain as early as late Friday because his detention over a territorial dispute has strained bilateral relations, the transport ministry said.

The decision to release him was announced earlier in the day by the Naha Prosecutor’s Office in Okinawa Prefecture.

The decision came roughly two weeks after Japan arrested Zhan Qixion, the 41-year-old skipper of a fishing boat that reportedly collided with Japan Coast Guard vessels near the Senkaku Islands in the East China Sea that are claimed by both nations.

A prosecutor at the Naha Prosecutors Office said the decision came after “careful consideration of future Japan-China relations” and the repercussions caused by the incident.

It is possible the skipper could be indicted later, but this is highly unlikely.

The office didn’t say when Zhan would be released, but sources said it would take place Friday evening.

Meanwhile, Chief Cabinet Secretary Yoshito Sengoku said Zhan’s release was decided by the prosecutors independently, denying any influence by the central government.

“I understand that the prosecutors reached the decision based on criminal law,” he said.

Sengoku also said that Prime Minister Naoto Kan, who is in New York, was notified of the decision and that the release was not related in any way to Kan’s meeting Thursday with U.S. President Barack Obama.

Political experts were highly critical of the timing of the decision and warned that the spat will only increase China’s clout in the region.

Chinese Premier Wen Jiabao has taken a hardline stance on the issue and threatened to take action if Japan did not immediately release the captain. Meanwhile, reports are circulating that Beijing has unofficially banned exports of rare earth materials to Japan.

The spat also led to the suspension of high-level meetings between Beijing and Tokyo.

Toshikazu Inoue, a professor at Gakushuin University, said the captain’s release came at the worst possible time for Tokyo diplomatically, given that Japan was forced to yield to China.

“(The captain) should have been deported immediately after the incident occurred,” Inoue said. “Or if not, he should have been thoroughly subjected to Japanese law and been indicted and put on trial — releasing him at this time was the worst possible thing to do.”

Inoue said now that Japan has buckled, China might ease off. On the other hand, Inoue warned that China might continue to take the initiative on the territorial issue by using its rising clout to exploit recent turbulence in Japanese-U.S. ties.

Mineo Nakajima, president of Akita International University and an expert on Japanese-Chinese relations, added that Beijing’s high-handed move is part of a global strategy and not just a plot aimed at Japan.

“If China compromises with Japan, it will damage its entire strategy” on territorial issues, Nakajima said. “It’s not just about the issue involving the Senkaku Islands.”

Nakajima said China is trying to send a strong message to its Asian neighbors, including Vietnam and the Philippines, which are embroiled in separate territorial disputes over the Spratly Islands and the Parcel Islands in the South China Sea.

“What China wants is natural and marine resources,” Nakajima said.

China first claimed the Senkaku Islands in 1969 after it became known the year before that there were abundant natural resources beneath the islands, he said.

The Chinese captain was arrested Sept. 8 by the Japan Coast Guard on suspicion of causing his trawler to collide with a patrol boat the previous day near the Senkaku Islands, which are administered by Japan but claimed by China and Taiwan.

Zhan is also suspected of illegally fishing in Japanese territorial waters.

The remaining 14 members of the crew have already returned to China after being questioned by coast guard officials.

Information from Kyodo added

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