Japan welcome Rubin as U.S. Treasury chief<\/p>\n
TOKYO (Reuter): U.S. economic policy towards Japan is unlikely
\nto shift dramatically after Lloyd Bentsen's resignation as
\nTreasury Secretary, but the hard-headed business sense of his
\nsuccessor, Robert Rubin, will be welcome here, economists and
\nfinancial experts said yesterday.<\/p>\n
"Mr. Rubin has already been in the core of decision-making in
\nthe Clinton administration, so that we can expect continuity,"
\nsaid Makoto Utsumi, a former vice-finance minister. "Everyone
\nknows his expertise in financial matters, so the market has deep
\nconfidence."<\/p>\n
Bentsen, 73, announced on Tuesday that he was resigning
\neffective from Dec. 22 and the White House nominated Rubin,
\ncurrently presidential economic adviser, to replace him.<\/p>\n
Bentsen's departure was seen as a major blow to President Bill
\nClinton as he prepares to confront a Republican-dominated
\nCongress hostile to many of his programs.<\/p>\n
"Secretary Bentsen was a political heavyweight and I think
\nthere are many people who regret his loss," Utsumi said.<\/p>\n
But Washington will doubtless maintain its pressure on Japan
\nto speed up financial deregulation -- a high priority under
\nbilateral economic framework talks, and a matter in which Bentsen
\nhas taken a personal interest, economists said.<\/p>\n
"No matter who is in charge, the pressure will be the same,"
\nsaid Takeshi Kondo, chairman of ITOCHU Political and Economic
\nResearch Institute.<\/p>\n
Bentsen's departure, however, will likely strengthen Japan's
\nperception that Clinton's administration is in disarray. That
\ncould well encourage Japanese bureaucrats, already inclined to
\ndrag their feet over reforms sought both by Washington and
\ndomestic businessmen, to stay tough.<\/p>\n
Erotion<\/p>\n
"The bottom line is yes, Clinton's power has certainly eroded,
\nand what I'm afraid of is that this will make our bureaucrats
\nmore stubborn," said Keikichi Honda, adviser to the Bank of
\nTokyo.<\/p>\n
Bentsen's announcement that he would step down came as
\nofficials from the two nations hunkered down in Tokyo for talks
\non better foreign access to Japan's financial services sector.<\/p>\n
A U.S. Treasury official said late on Tuesday that the two
\nsides remained far apart, but added that Washington was still
\naiming for an agreement by the end of 1994.<\/p>\n
"This sort of stuff (financial services talks) is on auto
\npilot," said one foreign economist.<\/p>\n
Rubin's knowledge of both Japan and financial markets,
\nhowever, will be welcome in Tokyo, economists said.<\/p>\n
A multi-millionaire, Rubin was formerly co-chairman of
\ninvestment banking firm Goldman Sachs and Co, and has won praise
\nfor helping guide economic policy in a U.S. administration not
\nknown for its organizational skills.<\/p>\n
Analysts said Rubin would be cautious about making comments
\nthat could jolt currency markets in the way Bentsen occasionally
\ndid -- a tendency which sometimes boosted the yen, and privately
\nirritated Japanese monetary authorities.<\/p>\n
In late October, for example, Bentsen's comment that the
\nUnited States had no plans to intervene to support the dollar
\nhelped push the U.S. currency to a post-World War Two low.<\/p>\n
Currency markets perceived such remarks as reflecting a U.S.
\nstrategy of boosting the yen to put pressure on Japan to open its
\nfinancial and other markets in bilateral trade talks.<\/p>\n
"In my opinion, Mr. Bentsen responded too skillfully to
\njournalists' questions, saying he preferred a stronger yen. Had
\nit been Mr. Rubin, I don't think he would have done that," Bank
\nof Tokyo's Honda said.<\/p>\n
"In general, Mr. Rubin's appointment should be good news for
\nthe stability of foreign exchange markets -- no more
\npoliticization of currency," he added.<\/p>",
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