Japan won't pressure China to reform yuan at meeting

I / Tokyo April 2, 2010, 12:45 IST

Japanese Finance Minister Naoto Kan said today he has no plans to pressure China to reform the yuan's exchange rate when he meets Chinese Premier Wen Jiabao and other top Chinese officials this weekend in Beijing.

"I'm fully aware that this issue is very important," Kan said at a news conference after a Cabinet meeting. "But I believe it would not necessarily be good to be thought of as putting pressure" on China to let the yuan appreciate.

Although the US Congress is saying many things, said Kan, he said he is planning to exchange views on the Chinese economy by telling China about Japan's painful experience in the late 1980s with its bubble economy, which was caused by excess liquidity.

Concerning the meeting on Saturday, Kan said he has a strong interest in discussing Japan's new growth strategy, with its strong emphasis on working with consumer demand in Asia, and wants to pave the way for creating "a win-win relationship" for the two countries.

Kan also said the Japanese economy is gradually recovering, thanks to a recent rise in Tokyo stocks and a weaker yen.

However, he cautioned that the economy is not yet realising a self-sustained recovery.

"At times like this, we should not be content," he said, noting that the government will continue to make efforts to boost domestic demand based on the new growth strategy, to be formulated by the end of June.

But Kan, who is also deputy prime minister, said he has no immediate plans to consider crafting an extra budget in fiscal 2010.