Analysis : Billions in U.S. Holdings Give Tokyo Big Lever

Japan, which holds at least $60 billion worth of U.S. government securities and billions more in American corporate stocks and bonds, has the economic leverage to back up Prime Minister Noboru Takeshita’s intention to obtain for his government a share of the United States’ global leadership.

In recent years, Japan has become a major lender in the United States, helping to finance the huge budget deficits of the Reagan Administration and buying up important blocks of American real estate and corporate securities. As a result, Japanese investment decisions could have a major impact on the American economy.

So far, Japan has not used its economic power to force changes in American diplomatic and political policy, and there are some very good reasons why it would be reluctant to go that far. But Takeshita made it clear in his Thursday meeting with President Bush that Tokyo expects to be consulted before Washington takes action on a wide range of global issues.

“There have been rumors for the past several years that the Japanese are ready to manipulate the U.S. Treasury bond market to affect policies that are important to them,” said Edward J. Lincoln, an Asia expert at the Brookings Institution in Washington. “The evidence of them having done this is very thin.”

Nevertheless, Japan clearly is ready to cast aside the reticence which has marked its diplomacy since World War II. For most of the Analysis

past 40 years, Japanese governments have followed Washington’s lead on political matters while building Japan’s war-shattered economy into the second-largest and, probably, most robust in the world.

“It is not clear whether the Japanese only want to speak up and make sure they are heard or if they have something specific they want to push the United States on,” Lincoln said.

It may be that Takeshita is doing nothing more than following U.S. allies in Europe in demanding additional consultation on such subjects as U.S.-Soviet relations.

“A great many of these calls for more consultations have been justified,” said Martin E. Weinstein, holder of the Japan Chair at the Center for Strategic and International Studies in Washington. “I would hope that we would act in such a way that we won’t have to hear any more of it.”

But a congressional staffer who specializes on Asia policy said Japan wants to be consulted on important issues but does not want to assume ultimate responsibility for shaping global events.

“Never in world history has a country acquired so much wealth without acquiring military and political power,” said the staff member, who declined to be identified by name. “You are going to see the second round of the Greater East Asia Co-Prosperity Sphere.”

The staff member’s pointed use of the term that Japan applied to the expansionist policy of its military government in the late 1930s seems to reflect the skepticism Japan faces on Capitol Hill.

Although Japan trails Britain as a lender to the United States, the Japanese government, Japanese corporations and individuals have invested well over $100 billion in the United States.

According to Commerce Department figures, Japanese residents and the government held $60.3 billion in U.S. Treasury securities at the end of 1987, the most recent year for which the report was available. In addition, Japanese owned $38 billion in corporate stocks and bonds. They also held direct investments totaling $33.4 billion in corporations in which they own at least 10% of the stock.

However, it seems unlikely that Japan would try to use its economic leverage. Although the Japanese military establishment has grown substantially in recent years, Tokyo concedes that it is unable to defend itself without American assistance. Also, an economic confrontation between the United States and Japan would damage both nations, an outcome that neither country would relish.