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. Last Updated: 07/27/2016

Mr. Yen Reveals Blunt Talking Behind the Scenes With Rubin

TOKYO -- How blunt does it get when top Japanese and U.S. financial officials go into a huddle over money matters?

"Eisuke, the world is going to hell, we've got to cooperate."

According to Japan's then-top financial diplomat, that is what Lawrence Summers, then-U.S. deputy Treasury secretary, said in a memo to him last September when the Asian financial crisis had swamped Russia and was lapping at U.S. shores.

In an article in both the Japanese and English-language editions of Wednesday's Yomiuri newspaper, Eisuke Sakakibara lays bare the blunt language of international finance officials usually masked by diplomatic formalities.

Sakakibara, known during his tenure as "Mr. Yen" for his sway over currency markets, also quotes Finance Minister Kiichi Miyazawa as giving his then-counterpart Robert Rubin a similarly straightforward assessment of Japan's economy around the same time.

"We are in a shambles," Sakakibara quotes him as saying.

"In my opinion," Sakakibara writes, "no other finance minister ever explained the economic situation in Japan in such a frank way."

Sakakibara stepped down from his post July 10 to become special adviser to the finance minister, while Summers ascended to the post of U.S. Treasury secretary a week earlier.

The former Japanese official also used the article to expound on a favorite theme - the coming "virtual" global economy.

"I am increasingly convinced that the next center of capitalism will not be an actual city or region, but cyberspace," he says.

"These 'cybercapitalism' convulsions drove the world, including Japan, to the verge of a great depression in September and October of 1998," he added.