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Official: Japanese Economy Fine

November 4, 1997

PITTSBURGH (AP) _ A senior Japanese finance official on Monday dismissed concerns that plummeting currency values in Southeast Asia might affect Japan’s economic recovery.

While the currency devaluations should make exports from Thailand, Indonesia and neighboring countries cheaper, they will not likely cut into the sales of Japanese exporters, Eisuke Sakakibara, Japan’s deputy minister of finance, told members of the Japan-America Society of Pennsylvania.

``Devaluation would strengthen the competitiveness of the countries in exports, but the relationship of Japan to Southeast Asia is more complementary than competitive,″ Sakakibara said.

Japan primarily exports high-technology products to Southeast Asian nations while importing raw materials and other goods from the region.

Sakakibara, speaking at the Duquesne Club in Pittsburgh, said Japan is considering several reforms to spur its economy. Cutting red tape in Japan’s financial markets is one of the crucial changes, he said.

A financial reform package that is to be announced on Nov. 15 may include cuts in taxes on real estate, securities transactions and corporate profits.

Sakakibara said he was more optimistic than others on prospects for the Japanese economy, pointing to bargain prices in real estate and Japanese stocks.

``I think those asset prices have hit the bottom,″ he said.

Sakakibara arrived in Pittsburgh from Jakarta, where he helped to put the final touches on the International Monetary Fund’s aid package to Indonesia. After lunch, he flew to Washington for talks with Deputy Treasury Secretary Lawrence Summers.

Sakakibara said Southeast Asia had been overdue for currency devaluations, calling them ``a necessary adjustment.″

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