ABSTRACT
Japan's response to the crisis came in the first instance in the form of a proposal for an Asian Monetary Fund (AMF), which was quickly abandoned in the face of US opposition. One feature of the Asian crisis was the fierceness of the contagion, which the global financial market tended to amplify. The Asian nations themselves must do many things on their own to strengthen their financial systems. The enhancement of governance in Asian economies is of vital importance. This should be achieved by engineering a web of checks and balances among institutions and thereby fostering professionalism. In the Asian region, most of the nations are becoming distinctively positive toward closer communication and consultation with each other on macroeconomic management. Japan's response to the crisis began with an ill-fated proposal for the establishment of an AMF. Incidentally, the Japanese government seems to be keen in defending short-term capital controls against some scepticism from the United States.
