Premier Takeo Fukuda goes to the United States for a summit meeting next week believing that the economic frictions of the past year have been controlled and that there is no need to press President Carter for any drastic new measures to stabilize the dollar.
In an interview yesterday, Fukuda said he feels that the measures Carter has promised to curb inflation and reduce oil imports are sufficient and that no major changes are necessary to stabilize the American currency.
His remarks contrasted sharply with the attitude expressed a few weeks ago by many leaders in his party and government who were calling for strong new antidotes for the ailing dollar.
With the dollar then falling rapidly on exchange markets, Fukuda himself had called the situation "very grave" and his economic ministers were busy drafting dollar-stabilizing plans for him to press on the United States. His chief advisers talked of returning to a semi-fixed exchange rate in which major countries would intervene jointly to keep the dollar from falling below an agreed-upon "target zone."
In the past two weeks, however, the dollar has stopped falling and has even risen on the Tokyo exchange and talk of drastic measures has subsided.
Fukuda said yesterday, "when I meet Mr. Carter I will be expressing my strong hope that there can be more stability in the value of the dollar." He said, however, that he would not be pressing for any specific new measures.
"Basically, I think this (current) approach is it for long-range improvement," he said.
Fukuda also appeared confident about reducing Japan's trade surplus, the major point of friction between the two countries. He ticked off reasons to expect that Japan's exports of automobiles, steel, television sets and ships will decline in the coming year and indicated that he will not invoke mandatory export controls.
Fukuda is scheduled to leave Sunday for Washington, where he will meet at the White House with President Carter next Wednesday. He also expects to meet with members of Congress about trade problems and will make a speech in New York.
So far as is known, no major decisions will be sought by either side in the latest of what has become almost an annual summit event. Economic issues will dominate the talks but it appears unlikely that either country will be pushing for drastic new measures.
Fukuda seemed more optimistic about cutting the large trade surplus than some of his economic advisers. They have said privately that cutting last year's current accounts surplus of $14.1 billion to a promised $6 billion this fiscal year will be very difficult to achieve.
Japan's exports were still booming at record levels in the early months of this year and there are no signs of a leveling off for several months.
Fukuda said a $6 billion surplus is still the goal, although in summing up what he thinks can be achieved he avoided using the specific figure and said only that the surplus will be reduced" substantially."
Auto exports will be held below that of last year through a policy of giving "administration guidance" to the car makers, he said. Steel exports will be held back by the carter administration, new "trigger-price" mechanism and television exports will be controlled by the agreement reached with the United States last year, he added. Exports of ships will decline because demand is slack, he said.
Japan's imports will increase, not much by natural processes as by the government's policy of making emergency imports of oil, nonferrous metals, and uranium ore, he added.
"We shall be taking drastic measures to increase such imports," Fukuda said. "All in all, I believe the government target of reducing the current accounts surplus substantially can be achieved and I will do every thing to achieve that," he said.
He said he is satisfied so far with the Carter administration's efforts to reduce oil imports. The promise to pass an energy package partly to reduce the U.S. trade deficit was a key part of the agreement negotiated Jan. 13 between Japan's trade experts and the U.S. special trade representative Robert Strauss.
Fukuda did note that Strauss' promise of energy legislation within 90 days was not met, however.
"It did not quite work out that way but when I say that I am not blaming Mr. Carter or Mr. Strauss at all," he said. "That kind of thing happens frequently. The main concern is to see that the legislation is passed by Congress and, if not, Mr. Carter had indicated he will do his best with administration actions. I would hope that this legislation will be enacted by the U.S. Congress without a great many amendments."
Did that mean Fukuda felt Carter is keeping his commitment of the January agreement? "Yes, my perception is that he is doing his best," Fukuda said.
Asked if he felt that the United States and Europe had pressed Japan too hard in the past few months to cut its trade surplus, Funka said:
"I believe what's important is for us to place ourselves in European and American shoes, so to speak, and not just be concerned about our own position.
"True, there have been pressures and complaints . . . but by any analysis a current account surplus to the tune of $14 billion a year is an extraordinary, large figure. I believe without any pressure or complaint from overseas we must reduce it and think to do so is a matter of our own responsibility in the world."