Japan sees a slight ray of hope of avoiding stiff US demands for greater defense spending. That hope is to provide the United States with advanced industrial technology for missiles and other weapons systems.
Prime Minister Zenko Suzuki's governmnet is looking at this idea as a slightly less painful way of meeting American demands than a politically dangerous major rearmament program.
But it is not yet clear whether this is wishful thinking, or whether the Reagan administration would really be satisfied with compromise.
At a recent Cabinet meeting, officials agreed differences between the two countries over defense and countermeasures against growing Soviet military might in the Far East and the Pacific could not continue.
The government, it was announced, would make a "full-scale effort" to enhance Japan's defense capability. But there was nothing to suggest this would go beyond the already planned 7.5 percent increase in the fiscal 1982 defense budget, which the US regards as insufficient.
Tokyo has been in deep shock since US defense planners last month presented a proposed "shopping list" calling for extra billions of dollars to be spent on doubling Japan's planned submarine fleet and antisubmarine air patrol force, as well as a drastic increase in its guided-missile destroyer force.
The Japanese are of two minds over the issue. The US Navy is now protecting Japan's oil lifeline from the Middle East. There is also an awareness Japan's current economic prosperity is possible only through the protection afforded by the longstanding US defense umbrella.
So, much of the current US criticism of Japan's limited defense effort is reasonable. Yet what Washington wants is considered virtually impossible at this time.
First, there is a clear constitutional prohibition on possessing a defense capability beyond the minimum for national self-defense (although that minimum has never been thoroughly defined), and a ban on sending military forces overseas, even for US peacekeeping duties.
Also repeatedly cited is a general pacifist sentiment in Japan since the 1945 surrender, as well as financial limitations imposed by a government belt-tightening program to erase a chronic budgetary deficit. (Defense is the only area that will get more money in fiscal 1982.)
So how could Japan convince the US it really wanted to pull its weight?
The government has now grasped at the straw offered by Defense Secretary Caspar Weinberger, who late last month asked for US access to Japanese technology for weapon improvement. Government sources said the impression has been gained that Tokyo might be able to offset considerably US demands for a militarily strong Japan in this way.
The sources said the US was particularly interested in Japan's ability to miniaturize large-scale integrated circuits, which could be incorporated in the next generation of missiles, as well as its expertise in precision instruments to be used in Buck Rogers-type laser weapons.
Chief Cabinet Secretary (government spokesman) Kiichi Miyazawa told reporters: "There may be some room for Japan to contribute to the US defense capability in that [technology transfer] area."
Government sources believe the move would certainly arouse strong criticism from opposition parties and certain sectors of the public -- who would claim Japan is being drawn ever more closely into the US military "web." But it is doubtful the storm would be anywhere near as violent as that against major rearmament.
There is growing interest here in more joint weapons development with the US to cut overall production costs.
One obstacle to technology transfer could be a longstanding government ban on weapons exports. These were first enunciated in 1967 following a parliamentary row over allegatios Japan was contributing television camera technology to US "smart" bombs dropped on Vietnam.
The government, therefore, said no weapons or products with a weapon potential could be sold to any communist state, any country covered by United Nations sanctions, and any nation likely to be involved in an international conflict -- virtually everyone.
But Mr. Miyazawa and the Foreig Ministry claim the weapons embargo is overridden by the 1954 Japan-US mutual defense assistance agreement. It provides for transfers of technical know-how for defense purposes. Further, the ban has never been legislated, so the government is not bound by it.
Government sources also say the US was never considered when the arms embargo was first discussed.
Anyway, they add, the technology under consideration has far wider applications than weaponry. So there is really nothing to stop such transfers from being made.
But will it b e enough to pacify the Reagan administration?