HEWING. May 4: Japan does not favour the US trade embargo against Iran, visiting Japanese Prime Minister Toiniichi Murayama indicated Thursday. A Chinese government spokesman also rejected the embargo, saying it would not help solve the problems it is Intended to solve, reports AP

Murayama, who left Beijing for Xian after a two-day state visit, told reporters that he believed terrorism should be faced squarely and dealt with properly.

But he suggested that' the embargo was not. in Japan’s view, a desirable course of action:

In Iran, there are those who support terrorism and those who do not. We have to encourage the moderate forces in Iran. We must keep the domestic political situation in Iran in mind as we formulate our policies." Murayama said.

Nevertheless. Japan had said Tuesday it would postpone a promised 45 billion yen (dlrs 542 million) loan to Iran.

Japanese loans are the only major source of foreign credit for Iran, and US officials had pressured Japan for months not to go ahead with the loan, the second in a package of three installments.

Japanese officials added ili.it they have not cancelled

the loan, but are postponing it indefinitely.

A Chinese Foreign Ministry spokesman also objected to the embargo announced by President Clinton Sunday to punish Iran for supporting terrorism and pursuing nuclear weapons.

"The current practice by the United States is not conducive to the solution of the problem and. instead, will only further strain relations between the United States and Iran." said ministry spokesman Shen Guofang.

China hoped the two countries would resolve their differences through negotiations and dialogue, he said.