The Bush administration came to power saying it wanted a new and softer approach to dealing with Japan compared with the outright critical one followed by the former Clinton administration -- less throwing rocks over the neighbor's fence and more discussion about how to help resolve problems.
"This president and all of us on his team have tried to take a policy of more quiet engagement," Hubbard said.
"After all, these are intelligent people in a major economy, I don't think we need to be preaching a sermon."
The most likely course for the Bush administration is to continue trying to persuade Koizumi to pick up the reform pace, and also to hope that Tokyo will take lessons from the fact that its international clout is at stake.
"While I think that reform is slower than many would have hoped, there's no reason we should giving up on him and I think that encouraging good policy changes is important," Taylor said, adding that he does not believe a crisis is imminent.
But he said Japan, unless it deals with its economic problems, will find its resources diminished for improving social conditions and for maintaining its global influence.
"It's something that the Japanese, assuming that growth doesn't pick up, will face," Taylor said. "An example of that is simply its relative importance in international policy.
"Japan has been very important ... a key player and will continue to be but if it's not performing well, then it won't play that leadership role and I think that's something Japan will face."
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