Fri, Mar 24, 2006 - Page 1 News List

Japan says it will delay decision on China loans

AGENCIES , TOKYO

In a sign of its strained ties with China, Japan said yesterday it would postpone a decision on fresh yen loans to Beijing until after its fiscal year ends next Friday.

This came as officials announced that Japan's trade balance had swung back into surplus last month after the first deficit for five years in January, as exports soared thanks to a strong global economy and a weaker yen.

A Foreign Ministry spokesman said that the delay on the loan decision did not mean Japan was cutting off or freezing aid to China.

"We will put off making a decision on yen loans for this fiscal year to China ... because of various situations surrounding Sino-Japanese relations at this time," Chief Cabinet Secretary Shinzo Abe told a news conference.

"The government needs more time to work on it," Abe said.

Bilateral relations have chilled markedly since Japanese Prime Minister Junichiro Koizumi took office in 2001 and began annual visits to Tokyo's Yasukuni shrine, seen by critics as a symbol of Japan's past militarism. Convicted war criminals are honored there along with 2.5 million war dead.

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