U.S. Officials Supportive of GOJ’s Recent Steps on Bank Reform

Over the last several weeks, U.S. officials have been generally supportive of recent initiatives proposed by Prime Minister Hashimoto (prior to his resignation) to aid the Japanese economy. This sentiment has developed following recent coordination by the United States and Japan to support the value of the yen and as the United States seeks to reassure Japan of the strong U.S.-Japan alliance in the wake of Clinton's high-profile visit to China.

After visiting China with President Clinton, Secretary of State Madeleine Albright traveled to Tokyo to meet with Foreign Minister Obuchi, who is presently considered the frontrunner to succeed Hashimoto. Albright expressed the U.S. belief that a positive relationship between the United States and China is also in the interest of Japan. At the same time, she stated that the United States is encouraged by Japan's plan for banking reform.

Other senior U.S. officials seem pleased with the GOJ's plans for a "bridge bank" to address the current banking situation, which U.S. officials have been calling for since the spring. Treasury Secretary Robert Rubin has stressed the importance of quick action. Rubin has called on Japanese authorities "to translate this approach [ie, the bridge bank] into concrete actions that will dispose of the burden of bad assets on the system." Deputy Treasury Secretary Lawrence Summers has echoed these comments and renewed U.S. pressure on Japan for "strong and sustained fiscal policies to promote growth."