TOKYO, NOV. 7 -- Japan's newly formed government today urged the United States in unusually strong terms to get its economic house in order and do its part to support the dollar.
Prime Minister Noboru Takeshita, who took office yesterday, and his newly appointed deputy prime minister, Kiichi Miyazawa, both said they expect the United States to abide by an international agreement on stable currency exchange rates. The White House has indicated recently that it will allow the dollar to slide rather than jeopardize the U.S. economy.
Miyazawa, who kept his job as finance minister while assuming the number two post, was particularly harsh in urging Washington to reduce its budget deficit. He said in an interview with Kyodo news service that Japan has done its share to solve the world financial crisis by stimulating its economy and keeping interest rates low.
"If others have new demands toward Japan, we want them to get their jobs done before they say something," Miyazawa said.
Miyazawa also likened Washington's reliance on a weak-dollar policy to a dependence on drugs, Kyodo reported.
Takeshita, in his first news conference since succeeding Yasuhiro Nakasone, was more diplomatic in his comments. He said he will strive to improve U.S.-Japanese relations, which he said will remain the cornerstone of Japan's foreign policy.
But Takeshita, a former finance minister, also made clear that he expects Washington to cut its deficit and support the dollar. The Bank of Japan has bought billions of dollars in recent weeks trying unsuccessfully to bolster the sagging U.S. currency. A falling dollar and rising yen increase the price of Japanese exports and, experts here worry, thus threaten the Japanese economy.
"These are problems where Japan and the United States have joint responsibility," Takeshita said, referring to a range of economic disagreements between the two allies. "We cannot solve these things just on the Japanese side."
The value of the dollar tumbled to postwar lows in Tokyo and around the world this week. The Tokyo stock market followed, declining sharply for the third straight week.
The dollar's plunge accelerated when Treasury Secretary James A. Baker III said Washington would rather ward off a U.S. recession than protect the dollar. The White House endorsed his statement.
Meanwhile, talks between the two nations on opening Japan's construction market to U.S. firms broke down in Washington. Commerce Secretary C. William Verity scheduled a trip to Tokyo for later this month amid calls in Congress for reprisals against Japanese construction firms.
Takeshita thus took over at a difficult time in U.S.-Japanese relations amid fears that he lacks the stature and charisma to be the strong international leader that Nakasone proved to be during his five years in office. The new prime minister, answering questions for 80 minutes this afternoon, tried to allay those concerns.
"My principle has always been to seek a consensus, to open my ear to others, and that I do not want to change," he said. "But now I am in a position where I must also make a decision and then faithfully execute it."
Takeshita and his new Cabinet today renewed their pledges to follow the policies of Nakasone's government.
Takeshita said he will promptly introduce a budget for next year that will stimulate domestic demand, as Tokyo has promised U.S. officials. Washington hopes that a more active domestic economy here will help reduce the trade imbalance between the two countries.
However, Takeshita said he will not stimulate demand so much as to risk stimulating inflation. "I've always said inflation is the biggest tax increase," he said.
Japan's new defense chief, Tsutomu Kawara, renewed Japan's promise to increase its financial support to U.S. forces stationed here. Japan pledged such an increase as a substitute for direct contributions to the U.S. military effort in the Persian Gulf.