Executive members of the ruling alliance on April 8 grew angry over a newspaper report that said the U.S. is getting even more specific in its suggestions on how Japan should fix its ailing economy.
A Japanese newspaper reported that U.S. Treasury Secretary Robert Rubin urged that the consumption tax be scaled back to 3 percent when he met with former Prime Minister Kiichi Miyazawa during Miyazawa's visit to the U.S. early last month.
It also reported that U.S. Ambassador to Japan Thomas Foley asked LDP Secretary General Koichi Kato whether it is possible to lower the tax rate. Kato denied the report.
Kato also said he has asked Miyazawa if Rubin had made such remark, but Miyazawa declined to reveal the details of his discussion with Rubin. When the consumption tax was increased to 5 percent in April 1997, Japan's already frail economy began on a steep descent.
Now, with calls mounting both domestically and internationally for Japan to take more vigorous economic stimulus measures, frustration among officials in the ruling Liberal Democratic Party is increasing.
Anger was vented the same day in a meeting of the LDP and its two non-Cabinet allies -- the Social Democratic Party and New Party Sakigake. LDP policy affairs chief Taku Yamasaki told the meeting that if Rubin had really made such a request, it would mean that the U.S. is interfering in Japan's domestic affairs, according to Kato.
He said the U.S. does not understand the sensitivity of the consumption tax issue, saying that prime ministers had to step down amid arguments over the tax's introduction.