No. 34 — September 3, 1999

JEI Report will not be published September 10, 1999 because of the Labor Day holiday. The next issue will be dated September 17, 1999.

Feature Article


Interview with Maj. Gen. Noboru Yamaguchi


During the past year, North Korea has fired over Japan what experts believe was a long-range ballistic missile and dispatched spy boats to Japanese waters. It also has been a generally uncooperative partner in four-way peace talks with the United States, South Korea and the People's Republic of China. Recent U.S. satellite surveillance and other intelligence data suggest that, any day now, Pyongyang could test a next-generation missile with a range that theoretically could reach Alaska. These actions, real and threatened, have jolted many Japanese, heightening their awareness of a potentially explosive situation uncomfortably close to home.

Maj. Gen. Noboru Yamaguchi, the defense and military attache at the Embassy of Japan in Washington and the highest-ranking military affairs representative to serve in any overseas post, recently explored with JEI Senior Political Analyst Barbara Wanner the security challenges literally staring Japan in the face. In the following discussion, he observes how developments in Northeast Asia have created new problems for Japan's diplomacy toward China. Mr. Yamaguchi also notes that Pyongyang's provocative behavior has given impetus to issues important to U.S.-Japan security relations, such as the Diet's spring enactment of legislation implementing the 1997 guidelines for bilateral defense cooperation and the recent conclusion of a memorandum of understanding governing research on a theater missile defense system. Perhaps most enlightening, Mr. Yamaguchi explores the extent to which the body politic's heretofore staunchly pacifistic views on Japan's defense role have begun to shift in recognition of the nation's responsibilities as a global power.

JEI Report will not be published September 10, 1999 because of the Labor Day holiday. The next issue will be dated September 17, 1999.

About The Guest

Maj. Gen. Noboru Yamaguchi was tapped this past June to serve as the defense and military attache at the Embassy of Japan in Washington. He brings to this three-year assignment a unique background as a military officer — he served as a helicopter pilot for the Ground Self-Defense Force — and as a respected scholar. Mr. Yamaguchi earned a master's degree in international relations at Tufts University and later was a researcher at the John M. Olin Institute for Strategic Studies at Harvard University. He is the only major general among 43 Self-Defense Forces military attaches stationed in 34 countries. American defense insiders regard his appointment to the prestigious Washington post as indicative of Tokyo's recognition of the increased importance of close U.S.-Japan security ties in dealing with the vicissitudes of the post-Cold War world.

JEI Report will not be published September 10, 1999 because of the Labor Day holiday. The next issue will be dated September 17, 1999.

Previous Issue aaaa Next Issue aaaa back to Index aaaa Publications aaaa Home

Weekly Review


Reverberations continue to be felt from the Economic Planning Agency's early June announcement that the economy grew a price and seasonally adjusted 7.9 percent on an annualized basis in the January-March period (see JEI Report No. 23B, June 18, 1999). Analysts, many of whom were expecting a minimal gain at best, initially were astounded. Perhaps to quiet its many critics, EPA said that it would release revised growth figures for the first quarter more quickly than in the past. Additionally, in what looked like a bureaucratic turf war, the Ministry of International Trade and Industry indicated that it would come up with its own gauge of aggregate economic activity before EPA got another crack at a measurement with its second-quarter gross domestic product announcement, which the agency now says will be made by September 17.



Interest rates on the Japanese government's 10-year bonds jumped to a seven-month high August 26 as trades during the day broke through the 2 percent level. Barely a year ago, rates on these instruments were below 0.5 percent (see JEI Report No. 36B, September 25, 1998), establishing lows that had no precedent since the 15th century. On the same day that 10-year rates were setting recent record highs, the yields on funds lent overnight between banks were scraping as close to zero as is possible at two decimal places. Overnight rates slipped to 0.02 percent from 0.03 percent, although the 0.01 difference is unlikely to matter much in anyone's economic calculations. The 0.03 percent overnight rate had prevailed since April when the Bank of Japan initiated a zero interest-rate policy in an attempt to further loosen monetary conditions and stimulate the slumping economy.



The yen/dollar exchange rate was a key topic at the August 29-30 Manila Framework Group meeting in Singapore. Officials from the finance ministries and the central banks of 14 Asian and Pacific countries as well as representatives from the Asian Development Bank, the Bank for International Settlements and the International Monetary Fund met to discuss the health of the global financial system and the state of the regional economy. Apart from the yen's recent appreciation, the agenda focused on such broader issues as hedge fund regulation, capital flows and exchange rate regimes.


The international community closely watched and eagerly supported the August 30 direct ballot in East Timor on autonomy within Indonesia or independence — a referendum seen by many as an opportunity for a peaceful resolution to decades of civil unrest. Hoping to foster political stability in Indonesia, Japan provided support for the Southeast Asian nation's parliamentary elections this past June and recently extended $10.1 million, including an emergency grant of $6.1 million, to the United Nations Trust Fund to help cover the cost of the East Timor vote. Tokyo also sent 2,000 radios to the local U.N. presence and dispatched a political affairs officer to U.N. headquarters in Dili, the capital of East Timor.

The cuts in interconnection charges that the Ministry of Posts and Telecommunications proposed July 30 make a mockery of Tokyo's May 1998 commitment to use a market-based pricing methodology to calculate the fees that other communications companies, especially long-distance carriers, pay to access the local networks of Nippon Telegraph and Telephone Corp.'s two regional services providers. That, at least, is the White House's view. In an August 27 statement, U.S. Trade Representative Charlene Barshefsky claimed that MPT's suggested rate structure, which is scheduled to be implemented next year, probably in the fall, would keep interconnection charges in Japan up to eight times higher than in the United States.

The Ministry of Agriculture, Forestry and Fisheries has belatedly cleared for import Pacific Northwest-grown Braeburn, Fuji, Gala, Granny Smith and Jonagold apples as well as two additional varieties of U.S. cherries. Producers had been waiting since late 1997 for this go-ahead. The July 30 action complied with the World Trade Organization's reaffirmed February 1999 decision that MAFF could not demand proof that treatments approved for eliminating potentially harmful pests from one variety of otherwise banned apples, cherries, nectarines, walnuts and four other types of "stone" fruit were just as effective on other varieties (see JEI Report No. 9B, March 5, 1999).

JEI Report will not be published September 10, 1999 because of the Labor Day holiday. The next issue will be dated September 17, 1999.

back to top aaaa Previous Issue aaaa Next Issue aaaa back to Index aaaa Publications aaaa Home