The 1971 U.S.-Japan Monetary Crisis
By Raymond Cohen
This Article Summary written by: Tanya Glaser, Conflict Research Consortium
Citation: "The 1971 U.S.-Japan Monetary Crisis," Selection from: Raymond Cohen, Negotiating Across Cultures: Communication Obstacles in International Diplomacy, (Washington, D.C.: United States Institute of Peace Press, 1991), pp. 52
The 1971 U.S.-Japan monetary crisis illustrates the effectiveness of taking differing cultural communication styles into account. In 1971 the U.S. was trying to persuade a reluctant Japan to revalue its currency. Japanese political decision making values consensus building. Culturally their negotiating style is low key and relationship based. Japanese negotiators do not react well to aggressive pressure tactics.
Secretary of the Treasury John Connally accommodated the Japanese style. His first visit was devoted to building relationships. "Wisely, Connally made no attempt on this visit to negotiate, let alone put pressure on his hosts, but insisted that his aim was to exchange opinions and, picking up a phrase used by Japanese diplomats, 'to improve mutual understanding.'"[p. 52] As he visited various Japanese officials, Connally explained American desires for currency revaluation, being careful to present them as interests rather than as demands or positions. This low key approach gave Japanese officials a better understanding of American needs, and made it easier for them to compromise without losing face.