American pressure on Japan to reform its economy has a patchy track record. The 1985 Plaza accord, that saw co-ordinated central bank action to inflate the value of the yen, arguably spurred Japan's late-1980s bubble economy. Gargantuan public spending during the subsequent bust was pursued at US insistence and underlies today's crisis conditions. This time a US president arriving in Tokyo does not come brandishing a big stick. An embattled Prime Minister, Junichiro Koizumi, yesterday received comradely support from President George W. Bush. Despite a shrunken popularity rating and growing doubts about his reform programme, Mr Bush refrained from lecturing and offered Mr Koizumi succour. Quite simply Mr Koizumi remains Japan's best bet to avert a financial crisis that would assume global proportions, and the White House knows it. On taking office in April he asked for three years to reform Japan. At the symbolic level government has become more transparent, ending the backroom carve up by special interest groups. Yesterday he recommitted Japan to speed the disposal of bad loans that is crushing banks and, as a result, credit creation across the economy. At the substantive level Mr Koizumi has backtracked on his 'reform without sanctuaries' promise, intervening to stop high-profile bankruptcies at zombie firms that by rights should go to the wall. In firing his popular foreign minister, Makiko Tanaka, he has squandered vital political capital. Mr Bush is looking at a bigger strategic map in Asia, placing emphasis on Japan as a trusted ally. His public commitment to Mr Koizumi also reflects the reality that there are no quick fixes. Everyone, including Liberal Democratic Party stalwarts, recognise the medicine that Japan's economy needs, even if they disagree on the sequencing and speed of these measures. But for a characteristic Bush syntax gaffe, confusing Mr Koizumi's policy on 'deflation' with a 'devaluation', the thorny issue of whether Japan should stimulate a yen depreciation through explicit inflation-targeting efforts was avoided. US officials have rightly expressed concern at a weak yen policy not rooted in concrete objectives tied to structural reform of banks and a bloated corporate sector. Repatriation of capital ahead of Japan's financial year-end appears to have stemmed the slide in the yen but, with deflationary trends hardening, Japan increasingly has few other policy options if an Argentinian scenario is to be averted. Mr Koizumi needs all the support he can muster to juggle so many balls. He may already have blown his chance but Mr Bush is right to stand by what remains Japan's best hope.