Authorities lost contact with the boat after it reported taking on water at 1.15 local time. Crew members of the Kazu-1 said the boat was tipping at a 30-degree angle and starting to sink. The Japanese coastguard dispatched five patrol boats and two aircraft to the scene to search for survivors.
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The tourists were said to be wearing life jackets.
However, temperatures in the area can plummet to as low as zero degrees Celsius at night time.
Two children were among the 24 sightseers on the Kazu-1 and were accompanied by two crew members.
Prime Minister Fumio Kishida instructed his Cabinet members to “do everything in their power to save lives,” a government official said.
The Transport Ministry also said it was setting up a task force to deal with the incident.
The boat was said to be on a three-hour sightseeing trip around the Shiretoko Peninsula.
It was cruising off Kashuni Falls, a famous site near the tip of the Shiretoko Peninsula, when disaster struck.
A local fisheries cooperative said there were high waves and strong winds in the area around mid-day.
The bad weather had forced fishing boats to return to port, the cooperative said.
The peninsula in the northeast of Hokkaido is a popular destination for spotting drift ice and was designated as a World Natural Heritage site in 2005.
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