Japan official wary of Iran sanctions impact

TOKYO (AP) - Japan's finance minister said Wednesday that he's concerned about the effectiveness of proposed U.S. sanctions on Iran, as well as their potential impact on Japanese banks.

Jun Azumi said last week that Japan would take steps to reduce Iranian oil imports in line with U.S. sanctions after meeting with Treasury Secretary Timothy Geithner.

But Azumi struck a more cautious tone Wednesday, telling journalists at the Foreign Correspondents' Club of Japan that if the sanctions were imposed immediately, they could sustain "tremendous" damage to Japanese banks.

"We want to take steps to keep the damage to the Japanese economy to a minimum," Azumi said.

The sanctions, targeting Iran's oil exports in an attempt to halt what Western governments say is its effort to develop nuclear weapons, would bar financial institutions from the American market if they do business with Iran's central bank.

Tehran claims the reactors are for civilian energy use and scientific research.

Japan imports about 9 percent of its oil from Iran. Analysts say Japan will likely turn to other major oil suppliers to offset any further declines from Iran.

Azumi said he understood the potential danger of Iran's nuclear program, but also acknowledged "there were some concerns" that the sanctions would not be effective in convincing Iranian authorities.

He added that "Russia and China hold the keys to resolving this situation."

A U.S. delegation led by Robert Einhorn, the State Department's special advisor on nonproliferation and arms control, and Daniel Glaser, the Treasury Department's assistant secretary for terrorist financing arrived in Tokyo Wednesday to discuss with Japanese counterparts how to proceed on the Iranian matters.

Earlier in the day, Azumi met with U.K. Chancellor of Exchequer George Osborne to discuss trade, Iran and other matters. Osbourne told reporers that the British government appreciated that it is not easy for Japan to switch nearly one tenth of its oil supplies quickly.

But he said the two countries agreed it is not acceptable for Iran to continue to develop a nuclear weapon and that "we are prepared to use the tools available to us in the international community to stop that happening."

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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