A lot was done to prepare for Putin’s visit to Japan in December 2016. Abe extended an invitation for him to come to his home city and made an offer for the two of them to enjoy a night in an onsen — no questions asked. What became known globally as the “Onsen Summit,” was a meeting between Russia and Japan which had the potential for re-sparking economic and political cooperation between the two countries.
Fun in the onsen
The meeting came at a key moment for the two nations. With President Trump now sitting in the White House, and both Japan and Russia being mentioned in his foreign policy, future cooperation between them both could prove prosperous.
For Japan, Russia is a potential ally in Asia that could help to contain the rise and influence of China, whereas, for Russia, Japan has the prospect of being a new friend in the East.
However, the meeting was doomed from the beginning, as both wanted something different from it.
Peace Treaties & Island Disputes
In the dying days of World War II, four islands that sit just north of Hokkaido, that also sound like they’re the names of new Pokémon, were occupied by the then Soviet Union: Etorufu, Kunashiri, Shikotan and Habomai. Once diplomatic relations were restored between the two countries, an agreement in 1956 was signed which stated that the islands of Shikotan and Habomai would be returned to Japan once a peace agreement was finally signed.
One of the primary focuses of the meeting was to try and address the peace agreement. However, this creates its own set of complications that not even a relaxing time in an onsen can fix. Putin has argued that there is no territorial dispute and that it is only Japan that sees the territory as disputed. 
Unfortunately for Japan, the meeting yielded no such results. Putin hasn’t backed down over his administration of the islands. Instead of handing over the island, he has pushed for the idea that the the islands can and should be a joint economic zone, where the two countries can invest and build infrastructure – with Moscow continuing their administration. This idea was only agreed upon as a future discussion.
While Abe wanted his islands, Putin wanted something more: money. Before the onsen meeting, the two countries had been in discussions about an “eight-point bilateral package” which seeks to help build and boost the Russian economy through investments in infrastructure, healthcare, energy, hot spring development, agriculture and fisheries in Eastern parts of Russia.
Perhaps in an effort to stall progress on the islands issue, Putin has stated that, for Japan, economic cooperation must be built before any sort of peace agreement can be signed. Beyond this, the two countries stated that they are expanding economic deals that includes around 80 businesses and government bodies on both sides.
Looking East not West
For Putin, the meeting was more than a chance to enjoy Japan’s omotenashi, it was a message. According to former US diplomat William Courtney, who told CNN: Putin was sending a message to the US – straight on the heels of Abe meeting Trump (about a month earlier), the meetings were a chance for Putin to build a friendship in Asia. 
Putin has increasingly had to look East instead of West when it comes to finding new friends to play with, plus seeking trade opportunities, as the West now only greets him with sanctions and hostility.
Although Japan may also seek future cooperation with Russia, it is no secret that Japan’s number one ally is America, and Japan joined other countries in putting economic sanctions on Russia over the Ukraine Crisis – a move that Putin has expressed his concern over, stating that it would mean Japan was not ready to fully commit to what would be needed for a peace agreement. 
Thus, Japan is left playing a dangerous game. On the one hand, its potential friendship with Russia may lead to the return of its northern islands, and an ally in containing the rise of China, but on the other, it must maintain its old alliances, and a strong stance in keeping Russia at arm’s length.
Russia is left holding all the cards…and towels
For Abe, the talks ended in little to nothing. His dreams of being remembered for regaining the islands have to be put on hold, as the slow progress of economic cooperation are discussed, built and managed.
According to James D. Brown, an associate professor at Temple University in Japan, the meeting provided little in the way of benefits to Japan, and any progress towards an economic framework for the islands still need to be discussed.  With the islands still under the control of Russia, and Japanese money flowing into the pockets of Moscow, it’s clear to see as to how Russia walked away stronger.