TOKYO. Apr 3 : Japan is to grant Vietnam low-interest loans of more than 10 billion yen (85 million dollars) as well as preferential trade treatments under most favoured nation (MFN) status, reports said today. reports AFP.

Prime Minister Keizo Obuchi will outline the plans In talks with Vietnamese Prime Minister Phan Van Khai. who is to visit Japan from Sunday, the Tokyo Shimbun said.

Vietnam will become the first recipient of special yen loans Obuchi pledged to extend to Asian neighbours in a policy speech in Hanoi last year, the newspaper said.

The loans, aimed at helping economic reforms and recovery in Asia, will total 600 billion yen over three years from April 1999, with concessional terms such as an interest rate of one per cent and redemption period of 40 years.

Japan, the largest bilateral aid donor to Vietnam, will extend the loans to Hanoi finance the construction of a bridge and port, the Tokyo Shimbun said.

Vietnam will be the second non-world trade organisation country, after China to receive most favoured nation status from Japan, the Nihon Keizai Shimbun economic daily said.