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To: Enigma who wrote (17698)	9/5/1998 8:21:00 PM
From: goldsnow	Read Replies (2) \| Respond to of 116770

Is it possible Rubin was trying to set-up Japan for looming crisis blame all along....? U.S., Japan square off over world's economic ills 03:23 p.m Sep 05, 1998 Eastern By Knut Engelmann SAN FRANCISCO, Sept 5 (Reuters) - Finance ministers from the world's two top economies headed home on Saturday after a meeting over Japan's sick economy and shaky world markets that appeared to leave both sides as frustrated as ever with each others' tactics. Having agreed that the world financial system was in a particularly precarious state, U.S. Treasury Secretary Robert Rubin and Japan's Finance Minister Kiichi Miyazawa failed to resolve a long-running argument between Washington and Tokyo over what Japan should do to help make it more financially stable. Ever since the Asian financial crisis gathered speed last year, the United States has been adamant that Japan needs to boost its flagging economy and clean up its debt-ridden banking system to do its part for stability in the world economy. Its calls for action have grown ever more shrill and impatient. Tokyo has become nearly as vocal in rejecting such U.S. pressure as insensitive and overblown. Meanwhile, Japan's economy remains stuck in the deepest recession the country has seen since World War Two. Friday's closed-door talks appeared to have changed little in that now-familiar setup. At a news briefing after the meeting, Rubin pointedly declined to be drawn on whether he felt more encouraged now that Japan would finally do what Washington wants it to do. ''The world needs Japan to rise to the economic challenge,'' Rubin said. ''I'd like to hope that the kinds of discussions we've had will move things forward, but ultimately, what's going to matter is what Japan does.'' Just before the talks got under way, a Japanese official insisted Tokyo had already done most of what it should do. Even though U.S. officials say Japan has moved in the right direction since the government of Keizo Obuchi took power in late July, U.S. desperation over Tokyo's apparent inability to take sufficiently bold economic steps has remained a constant. The ''window of opportunity'' for Japanese action that Rubin's deputy Lawrence Summers had proclaimed during a hasty trip to Tokyo in June appears to be closing fast. ''There has been a change in direction in fiscal policy in Japan and, more recently, also with respect to banking policy,'' Rubin acknowledged. But he quickly added: ''The judgment can only be made once Japan acts.'' In a separate briefing, Miyazawa said he recognised ''very well'' the need for Japan's recovery in the face of shaky world markets and added he had assured Rubin that Tokyo would take ''all possible steps to promote financial stability.'' Both sides insisted they had not talked in detail about currency values in foreign exchange markets, where the Japanese yen has recently gained some strength against the dollar. Washington helped Tokyo to intervene in foreign exchange markets in June to lift the yen from near its lowest level against the dollar in eight years in the hope that Japan would step up its economic reform plans in return, just before Summers rushed to Japan for a set of crisis talks. But uncertainty over the economic outlook has continued to cast a shadow over the yen's future. Miyazawa and Rubin were joined for dinner by Federal Reserve Chairman Alan Greenspan, who earlier on Friday had provided his own views of the world's financial ills and their potential to disrupt the still-booming U.S. economy. In a speech in nearby Berkeley, the central bank chief said the Fed was worried the U.S. economy might get hurt by the turmoil that has ravaged markets around the globe. He did not rule out a cut in key interest rates should the crisis turn out to do more damage than previously thought. Greenspan is a long-time friend of Japan's 78-year-old finance minister and former premier. Over dinner, their talk turned away from the immediate spat between Tokyo and Washington to the broader question of how to avert a global financial meltdown in the face of mounting turmoil in both emerging and developed economies. While there appeared to be a lack of fresh ideas on what both sides could do about it, there was agreement on the basic premise of the debate: ''The United States and Japan share the perception of a crisis of the global economy,'' a Japanese government source after the talks. Copyright 1998 Reuters Limited.