In a significant policy shift, Prime Minister Junichiro Koizumi signaled Monday that Japan is prepared to waive a "vast majority" of Iraq's foreign debt.
The pledge came amid U.S. efforts to win debt relief for Iraq from the world's major creditors.
"Japan would be prepared to eliminate the vast majority of its Iraqi debt if other Paris Club creditors are prepared to do so in the context of (a joint) agreement," Koizumi told James Baker, U.S. President George W. Bush's special envoy on Iraq debt.