Finance Minister Hikaru Matsunaga left April 15 for Washington -- a day later than planned -- to attend a meeting of finance ministers and central bankers of the Group of Seven industrialized nations and to hold talks with U.S. Treasury Secretary Robert Rubin.

Matsunaga was to explain that Japan intends to draw up an economic stimulus package worth more than 16 trillion yen later this month that includes at least 10 trillion yen in fresh measures. Tokyo also plans to implement another round of income and resident tax cuts totaling 2 trillion yen before the end of the year, bringing the total amount of tax rebates in 1998 to 4 trillion yen.

Rubin was meanwhile expected to repeat the U.S. call for Japan to ensure growth in domestic demand, stressing the importance of a healthy Japanese economy for the global community. Rubin told a news conference Tuesday in Washington that Japan needs a comprehensive overhaul of its taxation system if it is to steer clear of recession. "The question isn't what is the level of taxes. The question is what is the change in the level of taxes in order to create macroeconomic stimulus," he said.

Rubin's remarks were interpreted as a call for permanent tax rate reductions, and served as cold water to some Japanese officials who had said the size of the pump-priming package would help deflect criticism from Japan's G-7 partners over its lackluster economy. While Prime Minister Ryutaro Hashimoto has pledged to review the structure of personal and corporate income taxes, tax authorities say that would be an issue that cannot be fully discussed by the time the economic package is released.