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The Secretary of State for Dominion Affairs to the Prime Minister of New Zealand

My telegram of 6 May. Following for the Prime Minister is a summary of a recent appreciation by our military advisers on Japanese dispositions, strength and intentions in South-East Asia:

‘1. Territories still occupied by the Japanese in the South-East Asia area have now lost most of their economic importance to Japan, but as continued possession of these territories denies their economic resources to the Allies and pins down large Allied forces which would

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otherwise be available for attacks on Japan itself, these outer territories are still of strategic value.

‘2. Japan's strategy in this area is designed to impose the greatest possible delay upon the Allies and prevent the linking up of the British and United States forces.

‘3. The Japanese seem to have decided not to keep open the overland route through south China to South-East Asia, and with the sea routes virtually cut, no withdrawals or reinforcements of men or munitions are likely to or from Japan or her territories in the north. Her forces in this outer zone are inadequate for the defence of all the areas she now holds, and she will continue to regroup them as best she can so as to concentrate the greatest possible strength for the defence of Siam, Indo-China, Malaya, and the sea approaches to the South China Sea via the Malacca and Sunda Straits. To this end she is trying to thin out her forces in the less strategically important islands and territories, though this process of concentration is being made increasingly laborious, slow and costly by Allied operations.