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Japan's seeming return to recession is influencing global events with the country being the second-largest economy worldwide. Japan's clout is seen in Japanese Prime Minister Ryutaro Hashimoto's decision to stay the discount rate in June 1997, which led to the continued flow of large amounts of money into the US. That may have led US President Bill Clinton to win his second term as president. Another proof of the extent of Japan's influence is the gyrations in world stock markets. Japan, and not Thailand, served as the trigger that started the crisis.

Critics of Japan Prime Minister Ryutaro Hashimoto claim that the minister's austerity program is gradually sinking the country's economy. In a feat to outdo reformist Ichiro Ozawa, he succumbs to bureaucratic and political pressures and approves a 1998 budget cut and a one-time two trillion yen tax cut. These actions even defy a United States' call to reverse his spending cuts program and reflate Japan's economy.

Japanese Prime Minister Ryutaro Hashimoto's economic reform policies include a planned internationalization of the Tokyo financial market modeled after the New York and London markets. The planned deregulation, otherwise known as the Big Bang, is feared by industry insiders to result in the Tokyo market's domination by foreigners.

Discusses changes in the relations between the United States and Japan. Dependence between the two countries during the term of President Ronald Reagan; Background on the Framework negotiations; Implications of Japan's two-party system on its foreign relations with the United States.

Explores the relationship between Japan and the United States. Impact of Japan's external relations with US on domestic politics; Political contributions made by the US to Japanese politicians; Effect of post cold-war policies on the two countries' relations; Security interests of the US in Asia.