Charles Paul Freund's portrayal of the future of the Hollywood movie industry {"Rising Sunset Boulevard," Outlook, Dec. 2} was well written and quite humorous. Yet after my chuckles had subsided, I realized that I was left with an unsettled feeling.

In view of the recent acquisitions of major Hollywood movie studios by Japanese corporations, there is a widespread fear in this country that we are losing control of yet another previously American-dominated industry. As a sansei, or third-generation American of Japanese ancestry, I am acutely aware of the growing backlash of negative opinion in this country against growing Japanese investment.

These feelings have been further reinforced by the progressive monolithic expansion of the Japanese automobile industry, the escalation of American real estate prices by Japanese investors and the intransigence of the Japanese position in world trade negotiations. Finally, and perhaps the most bothersome to the American public, is Japan's perceived lack of contribution to the world effort to deal with the crises in the Middle East, especially given Japan's heavy dependence on imported oil.

Although I regret Japan's position on most of these issues, I think that it is important to maintain a balanced view of the situation. Because of this, I am concerned about Mr. Freund's satiric exaggeration of the future of the Hollywood movie industry as influenced by the Japanese. By illustrating the article with depictions of a Rising Sun flag flying over Hollywood and a Japanese Zero circling the Universal globe, the editors are touching on American fears remaining from World War II. This kind of emotional appeal makes a rational view of the issues difficult and can fuel racial prejudice. I would like to caution Mr. Freund and The Post about the dangers of raising the specter of another "yellow peril" threatening America's shore.

CHRIS H. TAKIMOTO Silver Spring

I am concerned about Japanese purchases of American companies. The recent agreement for the acquisition of MCA Communications by Matsushita Electronic {front page, Nov. 27} demonstrates some of the inequities in our investment policy with Japan.

I do not wish to single out Japan out of a sense of Western xenophobia. Germans, Dutch, Canadians and particularly the British have purchased American companies at an increasing rate during the past decade. There are major economic reasons for these shifting investment flows -- most concern America's tendency to over-borrow and under-save. The weak U.S. dollar also played a major role in the purchase of American assets by foreigners.

Regardless of how one views foreign investment in this country, most is reciprocal. American business can and does purchase companies in other countries.

The major exception is Japan, with whom we do not have a reciprocal relationship on investment. Even in the mid-'80s when the dollar was strong and Japanese investments were cheap, no major American purchases were made. Citibank, which had been looking for a Japanese acquisition, was turned away from several troubled banks for political reasons. Boone Pickens, even now, is not permitted board representation in a Japanese company where he is the largest shareholder {Business, Dec. 5}. Even when legal restraints are removed, cultural restraints replace them. The wink of an eye is often as effective as a law on the books.

I am not suggesting that we have a trade war with Japan. They are our friends, and we also need Japanese funds to finance our huge federal deficit. What I am suggesting is that we do not give away the store. Japanese companies should only be allowed to purchase American companies when a reciprocal relationship exists.

U.S. regulations forbidding the ownership of both television networks and movie studios bar such companies as General Electric from bidding for MCA. The Australian-based News Corp. is an exception to this regulation, with ownership of 20th Century-Fox studios and The Fox Network. Why not remove this burdensome regulation for all companies. It makes no sense to give foreigners a regulatory advantage over U.S. companies in the purchase of movie studios.

MCA, of course, is not interested in the nationality of its purchaser. Like most companies, it is concerned with its sale price and keeping management entrenched. Since it is obvious that the Bush administration will not act, Congress should act to block this purchase. RICHARD DeMARTINO Richmond