It didn't even last the weekend. Starting with a nationally televised retreat from his pledge by Hashimoto on Sunday, Japanese officials have executed an impressive flip-flop. Hashimoto hadn't actually "used the words 'permanent tax cuts,'" said Deputy Chief Cabinet Minister Teijiro Furukawa, and Obuchi "didn't make a public promise." That rug-pulling sent both the yen and the Nikkei index tumbling in Monday's trading and left the rest of the world wondering whether any of Japan's promises to anxious U.S. officials over the past few months have been worth anything at all. It certainly doesn't look that way.
Tokyo Flip-Flop
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TOKYO: Skeptics abounded when Japanese prime minister Ryutaro Hashimoto
signaled a move toward permanent tax cuts during a
campaign speech on Friday. But you could forgive U.S. officials if they
were feeling better after Foreign Minister Keizo Obuchi, in a joint news
conference Saturday with U.S. secretary of state Madeleine Albright in
Tokyo, described permanent tax cuts as a "promise" that Japan intended to
keep.