The U.S. government fears Japan may be developing a tendency to run a chronic current account surplus, Treasury Secretary W. Michael Blumenthal told Japanese Finance Minister Ippei Kaneko here last night.
At a dinner shortly after his arrival from Shanghai. Blumenthal urged the Japanese finance minister and other officials to take measures that would trim the surplus and lay groundwork for a long-term steady decline in the trade and current account surpluses. Current accounts measure the value of goods and services in trade now, while other trade accounts measure the value over longer terms.
Blumenthal's brief stopover here follows a week of economic talks here follows a week of economic talks with Chinese officials in Shanghai and Peking.
Japanese officials, after meeting with the American group, told reporters they believe that the trend of declining Japanese exports to the United States will be sustained, provided that the American inflation rate does not get worse.
They added that the current yen-dollar relationship is likely to be maintained at around the present 200 yen to $1, and in answers to questions, acknowledged that the Bank of Japan will intervene in exchange markets to keep i taround that level.
At last night's dinner, Blumenthal also raised the question of nufair treatment by the Japanese of American banks here. The 22 American banks in Japan claim they are discriminated against in branching and soliciting certain deposits compared with the advantages of Japanese investment banks.
The Japanese respond that the American banks get equal treatment with Japanese commercial banks. The banking question is relatively well down on the scale of Maerican complaints, but officials had never before said that it was under discussion.
The major irritant between the two countries is the Japanese current account surplus, which has been propelled by enormoust Japanese exports of finished goods to the rest of the world.
The current account surplus is expected to run $13 billion for the Japanese fiscal year 1978, which ends this month.The Japanese are predicting a decline to $7.5 billion in fiscal 1979, which, according to the way the Japanese run their fiscal year, will end in March 1980.
A high official with the Blumenthal party said there has been a substantial and encouraging reduction in the rate of the Japanese surplus during the last six months or so, "but we don't see the basis for projecting a further drop."
The implication is that unless Japan takes further action, the current account surplus might stabilize at the highly unsatisfactory world-wide level of $8 to $10 billion. The more favorable Japanese estimate is based on an expectation that domestic private investment will move ahead smartly, pushing economic growth in fiscal 1979 to the goal of $6.3 percent.
The Americans just do not think that's going to happen. Last year, the United States had a $17 billion current account deficit. Hopes for a reduction this year have been jarred by the unpredicted oil situation arising out of the Iranian crisis.
The Japanese will feel heat on this matter Wednesday morning in Washington when the policymaking Interim Committee of the International Monetary Fund has a regularly scheduled meeting.