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To: goldsnow who wrote (7886)	2/25/1998 7:13:00 PM
From: goldsnow	Respond to of 116764

Japan's Mr Yen lands in hot seat again over G7 05:45 a.m. Feb 25, 1998 Eastern By George Nishiyama TOKYO, Feb 25 (Reuters) - Japan's top financial diplomat, Eisuke Sakakibara, was in the hot seat again on Wednesday, admitting before parliament Tokyo did not agree completely with last week's Group of Seven (G7) nations communique. Sakakibara, called into parliament to explain the G7 meeting, said Japan told other nations there was no need for it to take new fiscal spending measures to boost its economy. That view is in stark contrast to the communique, which suggested Japan needed to take spending measures. The communique, touching on the Japan, said: ''In the view of the International Monetary Fund (IMF) there is now a strong case for fiscal stimulus to support activity during 1998.'' Grilled by an opposition politician over whether Japan agreed with the communique, Sakakibara said: ''The communique says that the IMF believes there is a need (for Japan to take fiscal spending measures). But we do not agree with that.'' ''We stressed there was no need for fiscal spending,'' the vice finance minister for international affairs said. Finance Minister Hikaru Matsunaga followed up by saying there is no agreement among the G7 nations on the need for Japan to take new fiscal spending measures. Their comments are likely to annoy U.S. officials who have made no secret of their belief Tokyo needs to take such measures to get its economy moving. U.S. Treasury Secretary Robert Rubin said after Saturday's meeting: ''The members of the G7...expressed the enormous importance of domestic demand-led growth and the need for fiscal stimulus measures in Japan.'' Sakakibara's troubles on Wednesday added to a string of woes he has faced recently. Last week, the outspoken bureaucrat was chastised by his boss, Matsunaga for making ''inappropriate'' remarks. Matsunaga said he had called Sakakibara and ''admonished him'' for making comments criticising the parliamentary system. Sakakibara had said on a television programme that Japan's parliamentary system obliged cabinet members to be in constant attendance during sessions of parliament, thus disrupting important foreign trips such as a G7 meeting. But his comments on Wednesday regarding the G7 are widely seen as revealing an open secret. Japanese officials have refrained from acknowledging the need for fresh spending measures out of fear that it could jeopardise passage of the 1998/99 regular budget. Kaoru Yosano, a senior member of the ruling Liberal Democratic Party (LDP), told Reuters on Wednesday that ''tactically'' it was not the right time to talk about additional fiscal stimulus measures such as a supplementary budget. ''At this time when the budget is being discussed in parliament it is very dangerous to talk about an additional budget because opposition parties will certainly say the present draft budget is imperfect,'' Yosano said. Although the yen fell briefly on Sakakibara's comments, it had recovered by late Wednesday trade on speculation that Tokyo would eventually bow to pressure to take further fiscal spending steps. ((Tokyo newsroom +81-3 3432-8022 tokyo.newsroom+reuters.com)) ^REUTERS@