Japanese Report Calls for More Open Domestic Markets
TOKYO (AP) _ Japan should act immediately to open its markets to foreign companies, loosen government regulation of the economy, shorten working hours and stimulate domestic demand, an advisory committee recommended in a report being released today.
The Finance Ministry meanwhile said it will allow Japanese financial institutions to participate directly in overseas financial futures transactions.
The moves come as the Japanese government is under increasing pressure to end the nation’s tradition of economic self-reliance and integrate more fully into the international economy.
The United States, which in recent years has been embroiled in sometimes- acri monious trade disputes with Tokyo, frequently has urged Japan to make its markets more open.
The thrust of the report is ″the necessity for Japan to transform its economic structure from one dependent upon exports to one led basically by domestic demand,″ Haruo Maekawa, chairman of the Special Committee on Economic Restructuring, said Wednesday. The committee delivers its report to the government Economic Council today.
Maekawa said the committee recommends Japan act promptly to improve market access for foreign companies, including construction firms that want a part in building a multibillion-dollar airport in western Japan.
Washington has accused Japan of selling computer chips overseas at unfairly low prices, and has also been trying to persuade Japan to buy more U.S. agricultural goods.
The report says a reduction of Japan’s trade growing surplus with the United States - $58.6 billion last year - ″cannot be achieved by Japanese efforts alone, but rather it should be attained within the framework of international policy coordination,″ said Maekawa.
Specifically, he said, the United States needs to reduce its budget deficits and increase its industrial competitiveness.
″If it doesn’t, the trade imbalance won’t be rectified,″ he said.
He said the report calls for less government regulation of the economy, a greater role for market forces, more government funds to build housing and stimulate domestic demand, increased food imports and shorter working hours -from 2,100 to 1,800 a year.
Maekawa said most of the recommendations were intended to be fulfilled by 1993-95, and that by the year 2000, ″economic restructuring would be fully implemented.″
The Finance Ministry announced Wednesday that domestic financial institutions will be allowed to participate directly in overseas financial futures transactions, beginning in May.
The decision covers Japanese banks, securities houses, insurance firms and investment trust management companies. It means they will be able to trade in currency, bond, stock index and other financial futures and options listed on overseas exchanges.
Futures contracts allow investors to buy financial instruments in the future at a specified price. Many investors feel such contracts reduce risk because fluctuations in currencies and markets do not affect the prices they eventually pay.
Until now, only overseas subsidiaries and branches of Japanese companies have been able to take part in such transactions, provided they were completely independent from their parent companies. The ministry had banned participation of Japanese firms in futures trading because of its speculative nature.
The decision was welcomed by officials of U.S. futures markets.
John F. Sandner, chairman of the Chicago Mercantile Exchange, said of the move, ″This is a momentous event ... it represents a giant step not only for the CME, but for futures markets generally and for the globalizaton of futures trading.″
Sandner is in Japan for the opening of the exchange’s Tokyo office.