Japan Clamps a Freeze on Kuwait Assets : Reaction: The goal is to protect accounts from seizure. Tokyo also plans sanctions against Iraq.

Japan on Friday imposed an unofficial freeze on Kuwait’s assets here to protect them from falling into Iraqi hands and announced that it would impose sanctions on Iraq to punish it for invading its tiny neighbor.

Chief Cabinet Secretary Misoji Sakamoto said Prime Minister Toshiki Kaifu had agreed to a request from President Bush to join other Western nations in taking coordinated action against Iraq, a supplier of 6% of Japan’s oil imports.

But Kaifu, after cutting short a vacation to return to Tokyo Friday night, decided to put off implementing sanctions until after an emergency meeting of the U.N. Security Council.

Bush telephoned Kaifu on Friday to urge Japan to act in concert with the United States and other Western nations in adopting sanctions against Iraq, Japanese officials said. The President said he hoped Japan would not feel restrained by its imports of Iraqi oil.

Kaifu assured Bush that Japan would act after the U.N. Security Council adopted sanctions.

“Japan is viewing the situation from the same standpoint as the United States and other Western nations,” Kaifu was quoted as telling Bush.

Finance Ministry officials, citing a lack of legal provisions to freeze Iraq’s assets in Japan, announced they will protect Kuwait’s assets by unofficially asking banks and stockbrokers to check the identity of anyone trying to redeem stocks, bonds or funds in accounts held by the royal Kuwaiti government or its institutions.

It was the first time Japan has ever taken such a measure in peacetime. Kuwait’s assets in Japan are estimated at more than $4 billion.

Speaking after Bush banned U.S. imports of Iraqi crude oil Thursday, Sakamoto, the government’s chief spokesman, said Japan “strongly condemns Iraq’s invasion of Kuwait.” He said Kaifu instructed his Cabinet ministers to draw up a list of specific sanctions against Iraq.

The sanctions are expected to include a ban on oil imports, a new freeze on $2.6 billion worth of promised loans and a moratorium on high-level official exchanges with Iraq. However, officials said a break in diplomatic relations is not being considered.

In a speech at a business leaders’ seminar in the resort city of Karuizawa, delivered before he returned to Tokyo, Kaifu said Iraq’s invasion “surprised” and “angered” him. Iraqi invading forces, he added, “should go home immediately.”

“Japan, too, must play a positive role to contain the fallout to the smallest possible limit,” Kaifu added.

Japan, which imports nearly all its oil, obtains about 6% of its shipments from Iraq and 4.9% from Kuwait. Petroleum provides 57.9% of the nation’s total energy. But unlike 1973, when Japan’s stockpile of oil amounted to only a 60-day supply, reserves that would last 142 days are now on hand.

Iraq reportedly owes private Japanese firms about $4 billion. Trade between the two countries last year amounted to $1.7 billion.