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To: goldsnow who wrote (8241)	3/11/1998 9:31:00 PM
From: goldsnow	Read Replies (2) \| Respond to of 116767

FOCUS-Japan PM to make weekend visit to Indonesia 06:16 a.m. Mar 11, 1998 Eastern By Yoko Nishikawa TOKYO, March 11 (Reuters) - In a surprise announcement, Japanese Prime Minister Ryutaro Hashimoto will travel to Indonesia this weekend for talks with President Suharto about the country's economic crisis. The announcement set off speculation that the sudden trip by the leader of Japan, Indonesia's biggest creditor nation, was part of international efforts to put pressure on President Suharto to abide by a programme agreed with the International Monetary Fund (IMF) to solve Indonesia's financial woes. However Japan's top government spokesman said the 24-hour visit was at Suharto's own urging, and Hashimoto had not been asked to make the visit either by Washington or the IMF. Hashimoto plans to leave Japan on Saturday afternoon and return home on Sunday evening. ''Discussions will focus on currencies and economic conditions,'' Chief Cabinet Secretary Kanezo Muraoka told a news conference in announcing the visit. Asked if Japan was preparing a new aid package for Indonesia, Muraoka said he was unaware of any package. Japan, along with international organisations such as the International Monetary Fund and the World Bank, participated in a $43 billion Indonesian bailout plan last October, promising to contribute $5 billion should the need arise. In January, Hashimoto sent a special envoy to Indonesia and promised to give Jakarta a 50 billion yen ($387 million) loan in the 1998/99 fiscal year, under Tokyo's official development assistance programme, to back its economic reform programme. Authoritative sources said Japanese Vice Finance Minister for International Affairs Eisuke Sakakibara also was likely to be in the prime minister's party. The sources said Sakakibara, known as ''Mr Yen'' for his influence on currency markets, was likely to fly to Jakarta a day ahead of the prime minister from Paris where he is attending a meeting of the Organisation for Economic Co-operation and Development (OECD). Japan is Indonesia's largest creditor, with Japanese banks accounting for 39 percent, or $23 billion, of Indonesia's $58.7 billion in foreign bank debt as of the end of June 1997, according to the Bank for International Settlements (BIS). Earlier on Wednesday, before his visit was announced, Hashimoto said pointedly Japan would continue to help Indonesia if it abided by the IMF economic reform programme. ''Japan has vowed to give as much cooperation as possible ungrudgingly to Indonesia within the framework of the IMF,'' Hashimoto told reporters. There is diplomatic capital for Hashimoto in the visit because there has been criticism in Washington and several Asian nations that Japan has not done enough to calm Asia's economic turmoil. Japan on March 3 signed a contract with Indonesia to provide up to 20 billion yen in 30-year loans at 2.2 percent interest for Indonesia's structural reform. It said at the time it was providing the loans along with structural adjustment assistance by the World Bank and other institutions like the IMF. However in recent days, as Indonesia has appeared to waver on implementing IMF reforms, Japan has sent out signals the loan may be delayed if Jakarta does not fall into line. On Tuesday, a Japanese foreign ministry spokesman said Tokyo would keep a close eye on how Indonesia implements the IMF mandated reforms. ''We are extremely interested to see how Indonesia implements the IMF reforms,'' a ministry spokesman said. ($1-129 yen) ((Tokyo Newsroom +81-3 3432 8022 tokyo.newsroom+reuters.com)) ^REUTERS@

To: goldsnow who wrote (8241)	3/13/1998 10:07:00 PM
From: Abner Hosmer	Read Replies (3) \| Respond to of 116767

Goldsnow - I've been mulling over this problem of Japan. Japan's financial institutions have a serious problem, and Japan is experiencing an enormous credit crunch, no one wants to loan out any money. The Japanese consumer doesn't want to spend. Asia has collapsed, so they aren't going to be buying a lot of Japanese goods, and they're going to be stiff competition as well. Japan is on the verge of recession and her banks are on the precipice of insolvency. US banks are at their fattest and most profitable in many decades. Foreign capital flows into the US are expanding. A number of Japanese institutions are already coming over here and attempting to sell preferred classes of securities in an attempt to reflate their balance sheets. Doesn't the obvious outcome begin to suggest a significant change in trend, that is, that Japan is going to have to borrow money from abroad to finance growth, and paper over her depleted balance sheets? The question in my mind; is Japan going to have to make the shift to deficit spending in order to recover, perhaps even becoming a debtor nation in the process? It would seem that this may be the inevitable outcome that Japan has been trying so hard to resist.