Japan's economic woes and the lessons to be drawn from the Asian crisis were top of the agenda as finance chiefs from the world's leading industrialised nations met in Washington.
Even before the half-day G7 meeting started, the US and Germany had called on Japan to act swiftly to kick-start its economy, with German Finance Minister, Mr Theo Waigel, urging Japan to act "more energetically" to consolidate its financial system.
US Treasury Secretary Mr Robert Rubin said it was "critical that Japan get back on a track of domestic demand growth. A strong Japan is very very important to the rest of Asia" and also to the world economy, he said.
Both Mr Rubin and Mr Waigel gave a cautious welcome to a 16 trillion yen ($124 billion) spending plan, including four trillion yen in tax cuts over two years, unveiled last week. Japanese Finance Minister, Hikaru Matsunaga and Mr Rubin, meanwhile, expressed concern during a bilateral session before the G7 meeting began about the excessive weakness of the yen.
Mr Waigel also noted yesterday that the yen was again very weak. It was trading close to 130 to the dollar in late morning trading in New York at 129.36, against 129.63 on Tuesday. Mr Rubin said that while the United States US supported last week's central bank intervention to support the yen, the key to strengthening the currency was for Japan to get its economy "back on track."
Meanwhile, officials anxious to avert another Asian financial crisis, will consider sanctions against economies that refuse to release timely data to the IMF, a European minister disclosed yesterday.
