}
CONFIDENTIAL
Mr Bottomley suggested that the liberalisation of
inward investment though desirable in itself might work
against the reduction of the surplus. Mr Hira hara
recognised this but pointed out that apart from the
problem of the balance of payments itself, this measure
would go some way to counter accusations that Japa_n
had profited from the open markets of the world without
opening her own. Mr Bottomley asked whether these
measures would in fact produce a situation appropriate
to a large balance of payments.
Sir J Pilcher
thought that fundamentally the difficulties of the
Japanese could best be remedied by the introduction of
the habit of the siesta and the five-day week.
+
Mr. Bottomley thought that trade union practices might
also have some bearing on the problem.
•
Japan and the UK both
Mr. Rawlinson thought that it would be helpful if
Japan could take a positive attitude to discussions in
the International Monetary Fund about the modernisation
of the Bretton Woods system.
regarded the Bretton Woods system as helpful and wanted
to me serve it. It had however not been working very
well and it would be useful to look at the possibility
of minor adjustments. It was not for us to press for
changes in the parity of the Yen, but a main difficulty
in the present system was the American deficit and
Japan's success had contributed to this. We welcomed
Japanese measures of liberalisation but as long as the
rapid accumulation of reserves in Japan continued
people would think that the Yen was a currency that the
Bretton Woods system suggested should be revalued.
Mr Sanders thought that if any currency was under-
CONFIDENTIAL
/valued