IV.  POLITICAL ENVIRONMENT
     A.  Nature of Bilateral Relationship with the US
     Japan's political relations with the United States are
anchored in the US-Japan Security Treaty, and characterized by
close cooperation on many important bilateral and multilateral
issues.  Under the Treaty, the US maintains about 47,000 troops at
bases in Japan.  The U.S.-Japan security relationship is widely
perceived as contributing to the peace and prosperity of both Japan
and the Asia/Pacific region.  On many important foreign policy
issues, Japan's policies complement US policies.  For example,
Japan has been an active member of the Middle East Peace Process,
and in 1993 announced a contribution of USD 200 million to the
Palestinians.  Japan has agreed to contribute USD 1 billion to the
East European environmental initiative, and has also provided
assistance to the Newly Independent States for dismantlement of
nuclear weapons.
    It is the U.S. Government's intention not to allow the
economic imbalance in U.S.-Japan relations to significantly erode
the security and political dimensions of the bilateral
relationship.
     B.  Major Political Issues Affecting the Business Environment
     Significant realignment of Japanese political parties began in
1992 and could continue for several years until the consequences of
planned changes in Japan's electoral system have worked themselves
out.  In the meantime, most Japanese observers believe that Japan
will probably be governed by coalition governments subject to
relatively frequent changes of cabinet portfolios and elections.
New coalition governments may seek to distinguish themselves by
promoting reforms, including in the economic and trade areas, but
difficulties in coalition management could complicate passage and
implementation of such initiatives.
     C.  Brief Synopsis of Political System, Schedule for Elections,
         and Orientation of Major Political Parties
     Japan is a strong democracy in which basic human rights are
well respected.  Under the constitution and in practice, the
Emperor's role is essentially symbolic.  Japan has a parliamentary
form of government.  The head of government, the prime minister, is
elected by Japan's parliament, the National Diet.  Elections to the
Lower House, the more powerful of the Diet's two chambers, are held
at least once very four years.
     Upper House elections are held every three years, at which
time half of the membership is up for election.  Most of Japan's
political parties espouse moderate or conservative domestic and
foreign policies.