Japan is expected to reject an Iranian request for a yen loan to fund a 770-km railroad project in an apparent bid to avoid antagonizing the United States, diplomatic sources said Tuesday.
Japan and Iran have been working to finalize the requested loan in time for a first-ever visit to Japan by Iranian President Seyed Muhammad Khatami, slated for Oct. 31 to Nov. 3.
In Japan, however, proponents of the loan appear to have failed to muster the consent of the Foreign Ministry, which remains anxious about how Washington would respond, the sources said.
Washington has accused Tehran of backing terrorists and proceeding with a program to develop weapons of mass destruction.