By Sandra Sugawara
Washington Post Foreign Service
Sunday, June 21, 1998; Page A19

TOKYO, June 20—Financial officials from around the world today stepped up the pressure on Japan to revive its ailing economy, saying swift action is "of vital importance . . . to the entire world economy."

Deputy finance ministers from the Group of Seven major industrial countries and representatives of 11 Asian nations, meeting here to discuss the Asian financial crisis, said in a statement that they welcomed recent Japanese promises to boost the economy, but "emphasized the importance of concrete actions to implement these plans quickly."

International financial experts hope that a strong Japanese recovery could boost other Asian economies. But as Japanese leaders have hesitated to implement painful reforms, global anxiety has grown over Japan's continued weakness, which threatens to deepen the Asian turmoil and hurt economies elsewhere.

After the meeting, U.S. Deputy Treasury Secretary Lawrence Summers said the joint U.S.-Japanese intervention in currency markets Wednesday to stop the yen's free fall had created a "window of opportunity" for Japan to stabilize its financial system and turn around its economy.

"What is very important in this window of opportunity . . . is that Japan take concrete policy steps on these issues," Summers said.

The visiting officials urged Japanese leaders to act swiftly to fix its moribund banking system, which is plagued with hundreds of millions of dollars in loans that are not being repaid, drying up capital and stalling the economy. They also recommended that Japan do more to stimulate consumer demand, open markets and eliminate burdensome government regulation. But, as predicted by Treasury officials, no new initiatives emerged from the meetings.

The Group of Seven is made up of the United States, Japan, Britain, Germany, France, Canada and Italy.

Some currency traders had expected more. The yen had been plummeting in recent weeks until Wednesday, when the Clinton administration and Japanese leaders halted its slide with a massive yen-buying operation. On Friday, the yen rose on rumors that a new economic reform plan would be unveiled at the G-7 meeting today, but fell sharply after U.S. and Japanese officials quickly sought to quash those expectations. In late New York trading Friday, the Japanese currency was changing hands at 136.10 per dollar.

Tokyo-based currency traders interviewed this evening said they expect markets to be cautious over the next several days. One reason, they said, is the belief that the United States may intervene again, if necessary, to prop up the yen's value. President Clinton visits China in the coming week, and Chinese leaders have complained that a rapidly falling yen is damaging to their economy.

But many traders agreed with Summers that there is a window of opportunity" and that if concrete actions are not announced soon, the yen will fall again. They added that expectation of U.S. and Japanese intervention to stabilize the currency probably will prevent it from tumbling as quickly as it has recently.

Special correspondent Akiko Kashiwagi contributed to this report.