Foreign criticism that Japanese markets are closed long has emphasized the limited role that imports, particularly of manufactured goods, play in the economy. Defenders of Japan's actions have made two general counterarguments. One approach suggests that the world's second-largest economy is far from closed to foreign goods and is not necessarily even unusual compared with other industrial nations. The other emphasizes the rapid growth of Japan's imports, implying that past arguments about the role of barriers no longer are relevant.
In the late 1990s, at least two new factors have become important. First, Japan has endured the longest period of sluggish growth in its postwar history. Second, other Asian nations grew rapidly as sources of supply but ran into severe difficulties of their own starting in mid-1997. Partly for these reasons, the value of the yen has fluctuated dramatically, hitting a high against the dollar in early 1995, only to founder for the following three years.
Amid all this turbulence, the question of whether Japan imports enough has not gone away. Perhaps surprisingly, the role of imports in the economy has continued to expand, at least through 1997. Nonetheless, some critics still argue that Japan remains an underimporter, pointing to its limited role as a destination for the shipments of beleaguered Asian neighbors as evidence.
LDP, OPPOSITION PARTIES CONTINUE TO FILL IN DETAILS OF BANK-RESCUE SCHEME by Jon Choy
After another week of tough bargaining, the ruling Liberal Democratic Party, led by Prime Minister Keizo Obuchi and Finance Minister Kiichi Miyazawa, and a three-member alliance of opposition parties appear to have narrowed their differences over how to alleviate the banking industry's nonperforming-loan problems. Although they had announced a basic arrangement September 18 (see JEI Report No. 36B, September 25, 1998), the two sides immediately disputed its meaning.
CONSUMER SPENDING IN THE DUMPS, POISED TO GET WORSE by Douglas Ostrom
When Tokyu Department Store Co., Ltd. announced September 16 that it would either sell or close a store in Nihonbashi in the heart of downtown Tokyo, Nihon Keizai Shimbun, Japan's leading economic daily, ran three articles, including one on the front page. The story was big news because until Tokyu's announcement, the idea that a department store would close in the downtown area of a Japanese city was unheard of.
COLLAPSE OF BANK DEAL DAMPENS CLINTON-OBUCHI TALKS by Barbara Wanner
The weather during the September 22 summit in New York City between President Clinton and Prime Minister Keizo Obuchi seemed an appropriate metaphor for the confab: foggy. The two leaders had planned to hold their first meeting since Mr. Obuchi's election to premier in late July at the Rockefeller family estate in Tarrytown, New York, north of Manhattan. Instead, the three hours of discussions, including a 45-minute one-on-one session between Mr. Clinton and Mr. Obuchi, were held at the Waldorf-Astoria hotel. Heavy fog grounded their helicopters and kept the two leaders, who were in New York for the September 21 opening of the 53rd United Nations General Assembly, in the city.
TOKYO PLEDGES NEW SOUTHEAST ASIA AID, MAY REVIVE REGIONAL FUND PLAN by Eric Altbach
Seeking to demonstrate Japan's commitment to Asia's economic recovery, Tokyo unveiled a new package of aid programs September 23 for struggling Southeast Asia. Speaking in Singapore, the final stop on a three-nation Asian trip, International Trade and Industry Minister Kaoru Yosano announced several "immediately effective measures" to help credit-starved Southeast Asian countries as well as Japanese companies doing business in those nations.