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TOKYO, March 12 (Reuters) - Prime Minister Shinzo Abe's government decided on Tuesday to hold a ceremony to mark the restoration of Japan's sovereignty seven years after defeat in World War Two, a sign of his drive to repair what conservatives consider dented national pride.
The popular 58-year-old Abe, who returned to office when his party swept back to power in a December poll, wants to revise the post-war, U.S.-drafted pacifist constitution and rewrite Japan's wartime history with a less apologetic tone.
His Liberal Democratic Party (LDP) had pledged in the campaign to make April 28 "Restoration of Sovereignty Day", to mark the day in 1952 when the San Francisco Peace Treaty took effect, formally ending World War Two and the Allied Occupation.
"There are an increasing number of young people who do not know that there existed a seven-year occupation period under which Japan lost its sovereignty," Abe told a parliamentary panel on Thursday to explain the plan, Kyodo news agency said.
Some Japanese business executives worry that Abe, who has been focusing on policies to revive Japan's stagnant economy, may shift gears to his hawkish security and historical revisionist agenda after a July upper house election that his ruling bloc needs to win to cement its grip on power.
Abe enjoys support rates of around 70 percent, largely on hopes for his "Abenomics" mix of big spending and hyper-easy monetary policies, but some political experts question how much backing there was for his parallel non-economic agenda.
"I think that for the right, the meaning of Sovereignty Day is to celebrate the end of a foreign occupation that imposed alien ideas and institutions on Japan," said Columbia University political science professor Gerry Curtis.
"Abe wants 'regime change' but most Japanese appear happy to have the regime the occupation made possible - democracy, peace, freedom, prosperity - rather than what they had before."
The plan has upset some residents of Japan's southern island of Okinawa, which remained under U.S. control for another two decades after 1952. Okinawa is still reluctant host to the bulk of U.S. military forces in Japan.
"We should not forget the history of hardships of Okinawa and should continue working on easing Okinawa's burden in hosting the (U.S. military) bases," Kyodo quoted Chief Cabinet Secretary Yoshihide Suga as telling a cabinet meeting in a nod to Okinawan sensitivities.
(Reporting by Linda Sieg and Kaori Kaneko; Editing by Michael Perry)