TOKYO, JAN. 18 -- Japan and the United States ended two days of talks today on "structural impediments" to trade, and U.S. officials said they had made only "incremental" progress in persuading Japan to change economic practices that inhibit imports.

The talks had been scheduled months ago -- "long before we knew about the gulf crisis," one Japanese official noted -- in order to follow up on an agreement reached last June aimed at reducing trade imbalances between the two countries. The agreement calls on Tokyo to revise business practices that make it difficult for foreigners to penetrate the Japanese market, and calls on Washington to cut its budget deficit and improve the competitiveness of U.S. industry.

Kenichiro Sasae, a Foreign Ministry official, said the talks were "very productive," even though the participants were distracted by war in the Persian Gulf.

U.S. officials were less upbeat, calling the negotiations "constructive and frank," suggesting agreement on some points and disagreement on others.

One member of the U.S. delegation said it was significant that the follow-up is taking place. The official said Tokyo is likely to alter its policies only under constant pressure from its most important ally and trading partner.

U.S. officials said they had advanced some new ideas on how Japan might loosen up its keiretsu system, in which groups of companies band together to form cozy relationships. Members of such groups often hold each others' stock and tend to give preferential treatment to other group members -- a practice that discourages sales of foreign products.

The Japanese agreed to consider some U.S. proposals for weakening keiretsu ties, including requiring companies to appoint more outside directors and enhancing the rights of minority shareholders. "I must say, however, based on the last two days, that it is not entirely clear that all segments of the {Japanese} government understand the need to tackle this problem," said Charles Dallara, assistant secretary of the Treasury for international affairs.

The U.S. negotiators also described as inadequate a recent proposal by Japan's Fair Trade Commission to increase fines for cartel activities from 2 percent to 6 percent of sales.

On the other hand, U.S. officials said they were pleased with Japan's first steps toward implementing one part of the June agreement that commits Tokyo to spend more than $3 trillion over 10 years on various public works projects. The government's draft budget contains a substantial increase in public works spending for the fiscal year starting April 1, a step that Washington believes will spur demand for consumer goods.

U.S. officials also said Japan was following up on other promises, notably a vow to ease the rules for the establishment of large retail stores.

For its part, the Japanese delegation expressed disappointment with Washington's inability to shrink the U.S. budget deficit. The Japanese noted that deficit projections are rising as the U.S. economy weakens and "We expressed that there would be a redoubled effort ... to balance the budget," said the Foreign Ministry's Sasae.