Japan unveils $30 bn package

"We wanted to discuss … how we can overcome economic difficulties in your countries," Miyazawa said in his opening remarks to the breakfast meeting. He said the aid was aimed at preventing a deflationary spiral from building up and helping the region’s economic recovery.

He noted that Asian nations were not threatened by immediate further crisis for the time being, now that their currencies have stabilised and their foreign exchange reserves have recovered. He added that the real problem for thecrisis-hit Asian nations now was falling economic growth rates and sluggish corporate earnings.

Miyazawa was due to hold bilateral talks with US Treasury Secretary Robert Rubin later Saturday morning and was also to attend the Group of Seven meeting in the afternoon.

Meanwhile, cash-strapped Asian countries today agreed with Japan that they must take measures to stimulate their economies and welcomed a 30 billion dollar aid offer by Tokyo. Finance ministers and central bank governors of embattled Asian nations met Japanese officials here before Japan’s financial leaders were to meet other members of the group of seven most industrialised nations later the same day.

“To overcome the current difficulties, while avoiding the risk of falling into a deflationary spiral, they agreed that it is imperative for the Asian countries to take stimulative measures to put their economy on the path of recovery and sustainable growth,” the six countries and Japan said in a joint statement. The officials fromIndonesia, South Korea, Malaysia, Philippines, Singapore and Thailand also said they welcomed a Japanese offer of 30 billion dollars in aid to help them rebuild economies battered by the financial crisis. “The countries concerned intend to immediately engage in bilateral discussions on how to implement the initiative,” the statement said.

The officials, here for next week’s crisis-focused IMF and World Bank meetings, also welcomed the recent improvement in exchange rates of Asian emerging market countries.