REGIONAL tensions rose amid speculation that Prime Minister Junichiro Koizumi would visit a shrine for war dead tomorrow, on the anniversary of Tokyo’s World War Two surrender, which is seen by critics as a symbol of Japan’s past militarism.

Japan’s rising sun flag flew at the Yasukuni war shrine and tourists thronged today in anticipation of the event of the year – a possible pilgrimage by Prime Minister Junichiro Koizumi.

Japan’s foreign minister today pledged to smooth ties with China and South Korea after Prime Minister Junichiro Koizumi enraged the two Asian neighbours and sparked business jitters by visiting a war shrine that critics say glorifies Japan’s militaristic past.

A Japanese court today rejected a lawsuit against visits by the prime minister and the Tokyo governor to a war shrine vilified by China and other Asian countries, a court spokesman said.

Deadly bombings in Baghdad and Indonesia and fear of terrorism in the United States, Britain, Israel and elsewhere cast shadows over New Year celebrations around the world.