Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education

Front Page



UK Politics







Talking Point
On Air
Low Graphics

Saturday, June 20, 1998 Published at 11:25 GMT 12:25 UK

Business: The Economy

Japan told to sort out crisis

Summers: wants swift action to curb the crisis

The BBC's Tokyo correspondent, Juliet Hindell: Markets will tell on Monday
Top financial officials from the world's leading industrialised countries and Asia have told Japan it must revive its economy and reform the way its financial system operates.

They said reform was urgently needed to ensure recovery not just in Japan, but globally.

But despite Japanese assurances that Tokyo would take prompt steps to deal with the crisis, no indication emerged from the conference of any specific plans.

The crisis has its roots in $500bn of bad debts held by Japanese banks.

The BBC's Tokyo correspondent, says the meeting has not achieved a great deal
The final statement says that the important thing is to restore confidence and growth in the countries most affected by the crisis and to achieve stability in exchange rates and contain inflation.

To do this, reforms to restructure and recapitalise financial sectors will be needed.

It also says that the revitalisation of the Japanese economy is urgently needed and welcomes the intervention of the United States and Japan on the exchange markets to control the price of the Yen.

The delegates agreed to co-operate further if appropriate.

Promise to act

During the crisis talks, the Japanese Finance Minister Hikaru Matsunaga sought to reassurance the international community.

He repeated that Tokyo would act quickly to deal with debts and improve regulation in the financial sector.

But the man they call Mr Yen for his influence on the foreign exchanges said there were no secret initiatives and he could not control the markets.

The American Treasury Secretary, Robert Rubin, has said the debt question is the most urgent economic issue facing Japan, with crucial implications for the regional and global economies.

The US Deputy Treasury Secretary, Lawrence Summers, who attended the talks, spent Friday meeting the Japanese finance minister and other officials.

He pressed Japan to act quickly to bolster the economy, warning that the good effects of the intervention in the currency markets last week might not last for long.

The crisis talks were attended by ministers and officials from the Group of Seven leading industrialised nations and 11 Asian countries, including China.

Representatives from the International Monetary Fund, the World Bank, and the Asia Development Bank were also present.

During the week, the Japanese and US Governments poured millions of dollars into the financial markets to bolster the value of the yen.

Advanced options | Search tips

Back to top | BBC News Home | BBC Homepage | ©

The Economy Contents

Relevant Stories

22 Jun 98 | The Economy
World watches for Japanese recovery

20 Jun 98 | The Economy
Japan promises action

22 Jun 98 | Asia-Pacific
Malaysian PM warns of economic colonialism

18 Jun 98 | The Economy
Why the US intervened

17 Jun 98 | The Economy
Japan pledges reform as markets soar

17 Jun 98 | The Economy
Japan pumps $32bn into its economy

Internet Links

Federal Reserve Board

The 1998 G8 Summit

The economic journal, Nikkei

The BBC is not responsible for the content of external internet sites.

In this section

Inquiry into energy provider loyalty

Brown considers IMF job

Chinese imports boost US trade gap

No longer Liffe as we know it

The growing threat of internet fraud

House passes US budget

Online share dealing triples

Rate fears as sales soar

Brown's bulging war-chest

Oil reaches nine-year high

UK unemployment falls again

Trade talks deadlocked

US inflation still subdued

Insolvent firms to get breathing space

Bank considered bigger rate rise

UK pay rising 'too fast'

Utilities face tough regulation

CBI's new chief named

US stocks hit highs after rate rise

US Fed raises rates

UK inflation creeps up

Row over the national shopping basket

Military airspace to be cut

TUC warns against following US

World growth accelerates

Union merger put in doubt

Japan's tentative economic recovery

EU fraud costs millions

CBI choice 'could wreck industrial relations'

WTO hails China deal

US business eyes Chinese market

Red tape task force

Websites and widgets

Guru predicts web surge

Malaysia's economy: The Sinatra Principle

Shell secures Iranian oil deal

Irish boom draws the Welsh

China deal to boost economy

US dream scenario continues

Japan's billion dollar spending spree