A Reassured Tokyo Must Deliver

Madeleine Albright’s weekend stop in Tokyo was a reassuring signal to Japan and other Asian nations worried that President Clinton’s lengthy visit to China marked a strategic shift in U.S. policy. The ceremonial trappings of the Clinton visit tended to exaggerate the substance, so it was important for the U.S. secretary of State to reaffirm that the U.S.-Japan relationship “is the cornerstone of our strategic policy in Asia.”

But that long-standing security partnership is about maintaining economic as well as military stability in the region. As Albright reminded Prime Minister Ryutaro Hashimoto, Japan has to do more on the economic front to fuel the recovery in Asia. The United States--along with markets the world over--is waiting impatiently for Tokyo to deliver.

Just before Albright’s stopover in Tokyo, Japanese officials unveiled a plan to clean up their failing banking system. But details were so sketchy that doubts arose immediately about its seriousness. Then there was talk of permanent tax reductions, seen as critical to Japanese consumer confidence, but Hashimoto later denied that he was planning any such cuts, even after next Sunday’s elections for the upper house.

It was precisely such waffling and vagueness that sent the yen into free fall last month, forcing the United States to intervene for the first time in six years to help stabilize the Japanese currency in international money markets. That was when Japan promised reforms.

The U.S.-Japan partnership, long based on military cooperation, is broadening to include global economic obligations. Tokyo aspires to a leadership role in Asia and the world, but it must carry its share of responsibility, as it did a year ago when it helped to fashion a package of financial support for the ailing Asian economies. Now Japan needs to be a model for refashioning a closed, centrally planned economy into a truly open and competitive market economy. It’s a chance to prove that the Japanese economic miracle was no fluke.