The Japanese government is in the final stages of negotiations to bring a hotly disputed set of small islands in the East China Sea under public ownership, Prime Minister Yoshihiko Noda said Friday, stressing his country's claims of sovereignty.

The result, as one Japanese analyst put it, was that “China scored an own goal,” immediately reversing what had been a favourable trend in bilateral relations under the ruling Democratic Party of Japan. More generally, while China spends billions of yuan in efforts to increase its soft power in Asia, its behaviour in the South China Sea contradicts its own message

Japanese naval and air force commanders suspended trips to South Korea which had been scheduled to start on Monday as part of a military exchange program, the South's defense ministry said.

Strategic mutual trust and national feelings between China and Japan have been strained, and think tanks from both nations on Wednesday called for a crisis management mechanism to cool down the heated bilateral spats.

“NATO is more than just a military Alliance”, the Secretary General said. “It is also a community of shared beliefs and principles. All members share the same fundamental values of liberty, democracy, the rule of law, and respect for human rights. And all our members are prepared to defend these values whenever necessary”, he added.

Kazuo Korenaga, executive director of the Japan-Korea Economic Association in Tokyo, a group that seeks to promote business and cultural exchange between the two countries, said that, “Politics should be politics, the economy should be the economy. Economic sectors, including the treatment of South Korean stars in the Korean boom, should not be influenced by this issue.”

Cooler heads are finally prevailing in the heated diplomatic row between China and Japan over ownership of a few rocky islets in the East China Sea. But the activists who fanned patriotic zeal in both countries by forcing their way onto the contested islands will almost certainly strike again.

“We want to stage the parade as a token of thanks for people who have supported us from across the country," Japan Olympic Committee president Tsunekazu Takeda said. "It will be great if this will help boost the momentum of Tokyo's 2020 Olympic bid," he told Japanese media.