TOKYO, .Jan 24: US Treasury Secretary Lloyd Bentsen kept up the pressure on Prime Minister Morihiro Hosokawa on'Sunday to cut Japan's trade surplus but said the Japanese leader faced pressing domestic problems, reports Reuter.

Under an economic framework pact signed In July. Japan greed to cut its currenl account surplus and improve access to some market sectors.

Bentsen told a Tokyo' news conference: "obviously, he has his work before him on politl cal reform at the same time."

Referring to the July pact. Bentsen said: "If we do not have credible agreements by the time of the summit, we would have to re-examine l he basis of the framework. .. we

will not settle for any cosmetic agreement

He denied this was a threat, declaring: "I don't mean it to be one I think these are just the realities of the situation "

Hosokawa Is due to meet President Bill Clinton In Washington on February I I and Japan has pledged .to reach market opening deals by then in trade tn cars and car parts, insurance and govern

-merit procurement covering mostly telecommunications and medical equipment.

Negotiators say the two sides are far apart In a dispute over clause in the pact calling for quantitative or qualitative indicators to measure progr-

Japan rejects • numerical trade targets as managed

trade.

The United States had hoped that Hosokawa could put pressure.

Japan rejects pumerlcal trade targets as managed trade

The United States had hoped that Hosokawa could put pressure on bureaucrats to reach agreements before the summit

But the future of Hosokawa s government Is in doubt after parliament s upper house threw out his coalition s prize package of political reform bills on Friday.

Bentsen. who stopped over al the end of a 12day tour of Russia and Asia, said he believed Hosokawa was committed to reaching agreements under the framework pact.

Bentsen said Hosokawa still

intended to go to Washington next month and denied Japan had asked the United Stales to go easy on trade matters because of its political turmoil

They've said they're ready to go ahead and the Prime Minister said he would have his |>eople working on it dfli-gentlv Bentsen said

Hosokawa told Bentsen he would do his best. "Right now what Japan need. most, both politically and economically, is leadership, and I will do my utmost.'' a finance ministry official quoted him as saying.

Finance Ministry officials had l>een negotiating over this time lag with coalltfon panjes before the'government lost the vote last week and an economic package had been expected to be unveiled this week.