China has deliberately been omitted, on this first occasion. The meeting will last for a day and will, apparently, take the form of exchanges of views on developments in individual countries and around the region. The BIS model is clearly in mind and Togo (who will himself attend) talked of the meeting as an Asian edition of the BIS. The idea is, he said, that such meetings should be held two or three times a year, basically under the auspices of the Bank of Japan, although meetings might be held in other places from time to time.
3. This is an interesting development in the context of moves towards closer economic integration and cooperation in the Asian region and growing Japanese interest in the rest of Asia. It would be informative to know how the other particiating Central Banks see the meeting and the role of the Bank of Japan itself, in particular. The Bank of Japan appear no more eager than they have ever been to see a yen bloc develop in Asia, nor, while there is a gradual increase in holdings of yen by other Asian countries, do they view a major increase in the regional use of the currency as a very likely development, in the near future. Nevertheless, economic relations between Japan and Asia, stimulated by the growing prosperity of the region and increasing Japanese investment (which are inter-connected) are becoming of greater significance, as is the development of the region itself. It is not surprising that the Bank of Japan should want to get closer to what is happening around the area and also to develop stronger relationships with the other Asian Central Banks. Togo told me that these relationships have not been particularly close in the past and, travelling around the Asian region, I have heard this from the other end. I have also heard that the Bank of Japan can rival the Bundesbank in the aggressive and peremptory approach which they take, at times, with those who use the yen in a way of which they do not approve. I shall try to follow all this and report further.
4. I am copying this letter to Hugh Evans (HMT) and to Roger Bone (ERD) and Alan Paul (HKD) in the FCO.
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Jurs
John
evm
JE W Kirby
Minister (Financial)
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