To halt the progressive souring of trade relations between the United States and Japan, politicians and businessmen here are urgently considering the following steps: An all-out effort to increase domestic demand.
A $10 billion issue of ``Nakasone bonds'' in the world market.
An international conference to stabilize yen-dollar and other exchange rates.
An accelerated program to cut tariffs and simplify import procedures.
The tug of war between President Reagan and the US Congress over market-opening pressures vs. out-and-out protectionism has increased the sense of urgency here.
A series of high-level officials will be taking Japan's case to the US, starting with Foreign Minister Shintaro Abe at the end of this month, then veteran legislator Susumu Nikaido at the beginning of October, and culminating with Prime Minister Yasuhiro Nakasone Oct. 21. Messrs. Abe and Nakasone are primarily visiting the United Nations, but Mr. Nikaido, vice-president of the ruling Liberal Democratic Party, will concentrate on Washington.
Japanese leaders generally agree with President Reagan that opening markets in order to expand world trade is far better than protectionist legislation of the kind Congress wants. But Japan's own market-opening measures have been reluctant and slow, and the ``action program'' announced with great fanfare at the end of July failed to arouse much enthusiasm either on Capitol Hill or around the world.
Even if Japan opened its market totally, its trade surplus with the US -- $37 billion last year and probably $50 billion this year -- is not expected to shrink by much.
To attract imports in a really big way, domestic demand must be stimulated by tax reductions or government pump-priming, or a combination of both. Prime Minister Nakasone recognizes the need, but faces the same problem of huge government deficits that President Reagan does. Unlike the US President, Nakasone has chosen to rigidly restrict government spending -- defense and economic aid being the only exceptions.
Nakasone is appealing to private industry to increase investments at home instead of sending surplus funds abroad. Some of his rivals within the Liberal Democratic Party say this will not be sufficient -- there will have to be major pump priming as well. Mr. Nikaido is one such leader, and so is former state minister Toshio Komoto.