Albright tones down criticism of Japan's stimulus package

Japanese Foreign Minister Keizo Obuchi and Albright

April 28, 1998
Web posted at: 3:24 a.m. EDT (0724 GMT)

TOKYO (Reuters) -- U.S. Secretary of State Madeleine Albright on Tuesday toned down Washington's criticism of Japan's economic recovery efforts, saying a recent stimulus package was a bold and important step forward.

In Tokyo on the first leg of a week-long Asia trip, Albright also said the $128 billion economic package announced last Friday should also help to curb Japan's trade imbalance with the United States.

Asked how the United States viewed the package of measures released by the Japanese government on Friday, Albright told a news conference:

"Generally, we see this is as a bold and important step forward by the (Japanese) government."

Her comments cheered Tokyo stocks, lifting the market benchmark Nikkei average off its lows in early afternoon trade.

Japan's biggest-ever stimulus package included tax cuts, government spending and low-cost loans to boost an economy that analysts say is on the brink of recession.

Washington has in recent months been highly vocal in its calls for Japan to do more to boost its stagnant economy.

U.S. officials have also said they do not want Tokyo to try to export its way to economic recovery -- a policy that would further boost Japan's trade surplus.

Treasury Secretary Rubin says more has to be done

In a statement after Tokyo announced its package, U.S. Treasury Secretary Robert Rubin described it as a positive step but said more had to be done so Tokyo could pull other Asian economies back to prosperity.

At the same news conference as Albright, Japanese Foreign Minister Keizo Obuchi said Tokyo's trade imbalance with Washington was due to the yen's weakness against the dollar.

Obuchi said Japan was aware that it must do more to stimulate its economy so that it can boost imports.

"Japan must stimulate its economy to boost imports....and carefully act on the yen/dollar rate to solve the trade imbalance between Japan and the United States," he said.

He promised that Japan would move ahead with deregulation to allow in greater imports.

Albright's trip will also take her to China, Mongolia and South Korea.

In the news conference, she assured Japanese that Tokyo remains the most valued U.S. ally in Asia despite Washington's recent focus on improved ties with China.

The United States over the past year has made progress in its intensive effort to improve what had been disastrous ties with China.

As part of that campaign, President Bill Clinton is to hold a summit with Chinese President Jiang Zemin in Beijing in late June, the first visit there by a U.S. president since Chinese authorities crushed a pro-democracy movement in the city's Tiananmen Square in 1989.

Clinton is expected to spend nearly a week in China but is not planning to visit the two countries that are the closest -- and democratic -- American allies in Asia, South Korea and Japan. Clinton visited both countries in 1996.

Copyright 1998 Reuters Limited. All rights reserved.

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