Tokyo , Japan ( CNN ) -- It was not a quiet weekend for the prime minister of Japan , facing a diplomatic test abroad from China and questions at home about his leadership . Sitting down with CNN -- his first interview with an international television network -- Prime Minister Naoto Kan answered wide-ranging questions from pressing economic issues leading up to the upcoming APEC ( Asia-Pacific Economic Cooperation ) summit , to the diplomatic challenges from economic superpower China . Kan is a leader looking for a path out of a maze of domestic and international hurdles . He faces the monetary monster that is the sharply rising yen , that 's prompting corporations like Toyota and Nissan to push production and jobs outside of Japan . Diplomatically , he is in the middle of a major test with China , a country wielding growing strength in the world economy , and a superpower that 's just surpassed Japan in economic might . Japan is in an ongoing dispute with China over islands in the east China Sea . The islands , called Senkaku in Japan and Diaoyu in China , are claimed as territories by both countries . `` As far as Japan is concerned , '' said Kan , `` there is no territorial issue connected to the Senkaku islands . In fact , the Senkaku islands are the inherent territory of Japan . That is recognized in our history and also by international law . '' On September 7 , the Japanese coast guard encountered a Chinese fishing crew in the islands ' waters . The Chinese fishing vessel collided with two of the coast guard ships . Japan arrested the Chinese crew , quickly releasing the fishermen , but detaining the captain . His detention drew diplomatic fire from China , resulting in the cancellation of high-level ministerial meetings , most recently the abrupt cancellation of a scheduled meeting between Kan and Chinese Prime Minister Wen Jiabao at the Association of Southeast Asian Nations . Japan eventually released the captain , but relations continue to be strained . At the time of the September 7 incident , the Japanese coast guard captured both collisions on video . The video , deemed highly sensitive by the prime minister 's office as it sought a smooth diplomatic out with China , was not released to the public , but shown to a select group of parliamentary lawmakers . Last Friday , the video appeared on YouTube and quickly went viral , sending Prime Minister Kan 's office on the diplomatic defensive . Members of the prime minister 's own party publicly began to question his handling of the matter . `` The fact that the video was leaked is a big mistake for the government , '' said legislator Hiroshi Kawauchi , of the prime minister 's ruling Democratic Party of Japan . `` It is totally different from presenting it to the public in an official manner , and it leads ( to ) the people 's further erosion of faith in Japan 's government . '' In the weekend interview with CNN , the prime minister defended his actions . `` I believe in any country that matters that relate to its territory provoke strong sentiments among people of that country . But I trust five years , 10 years down the road , people then will appreciate my cabinet dealt with the issue in a calm manner . '' While the prime minister must try to contain the diplomatic damage with China , the most pressing matter in the week leading up to the APEC summit will be economic issues . Kan strongly defended his government 's right to intervene in the currency market , in attempts to weaken the yen 's sharp rise against the U.S. dollar . Japan had little choice , he suggested , since U.S. policy has been to boost the U.S. economy . `` With regard to the strong yen , the basic cause is the U.S. economy was undergoing changes with everything being skewed to a weak dollar , '' said Kan. `` Should there be excessive fluctuations in exchange markets , then we need to take resolute actions . In fact , we 've already intervened in the market once . This remains an option we can take again . '' How long Kan remains in his job is a constant question lobbed publicly by many pundits in Japan . The topic is a natural one , as there have been five Japanese prime ministers in four years . Prime Minister Kan asserted he 's shown leadership and results , producing a rare-earth minerals partnership with Vietnam and the deepening of an economic pact with India . `` As we move forward by achieving concrete results , one after another , these will become more visible to the Japanese people . I still have three more years in my term in office . If I firmly implement policies , I trust I will be able to have the support of the Japanese people , '' Kan said .
Japanese Prime Minister Naoto Kan faces a maze of domestic and international issues . Economic issues are at the forefront in the week leading up to the APEC summit in Japan . In a CNN interview , Kan defends his government 's intervention in the currency market .