Japan and the United States agreed Monday to deal more closely together with problems related to the millennium bug, as small and medium-size firms on both sides of the Pacific struggle to overcome the financial hurdle to remedy their computer systems by the turn of the century.

If left unresolved, many computers may malfunction sometime in 1999 because their systems are designed to operate by only reading the last two figures of the year in dates, thus 2000 would be read as 1900.

John Koskinen, assistant to the U.S. president and chairman of the President's Council on Year 2000 Conversion, visited Prime Minister Keizo Obuchi and other Japanese government officials Monday as well as business leaders in Tokyo to share the urgency over the so-called Y2K (year 2000) problems, according to officials of the Ministry of International Trade and Industry.

While praising Japan's efforts to date to cope with Y2K, Koskinen told Obuchi of the importance of both governments impressing upon the public a greater sense of urgency, saying the issue will widely affect both countries.

They also agreed to step up bilateral cooperation through such international venues as the United Nations and the Organization for Economic Cooperation and Development to provide direct assistance to third parties.

While informing each other of the progress made so far in six priority areas, including finance, transportation, energy and medication, the two sides expressed concern that small businesses are too pressed with everyday financial problems to give Y2K problems adequate consideration.