"If this region is to overcome its current difficulties and to achieve dynamic economic growth into the new century, it is essential that we continue to work together for multilateral trade and investment liberalisation," Obuchi said in a speech.

"We must have the courage to carry through the necessary reforms to regain the market's confidence, no matter how painful," he added in a speech sponsored by Singapore's Institute of Policy Studies.

Obuchi was on the last leg of a three-nation tour which also took in Thailand and Malaysia.

Outlining Tokyo's policy towards its east Asian neighbours in the run-up to the next millennium, Obuchi said Japan would not shirk its responsibility to help fellow Asian states despite its own economic difficulties. "We will continue to exercise the leadership to support the eastAsian countries in cooperation with the international community," he said.

Tokyo's efforts -- which include contributing about $37 billion to International Monetary Fund and bilateral bailout packages -- had been hindered by the collapse of the bubble economy, which had left Japan "in a state of severe stagnation," Obuchi said.

But he was optimistic the 16-trillion yen (US$123-billion) economic stimulus package unveiled last month by prime minister Ryutaro Hashimoto would yield the desired results in Japan and thereby help revive crisis-stricken Asian nations.

"Japan fully realises how important its own economic recovery is to restoring stability to the east Asian economies," Obuchi said.

However, he said governments of the stricken nations must pursue economic reforms "with a view to achieving the transparency and accountability that meet international requirements".

Japanese aid to neighbour states was the major theme of Obuchi's address, which also unveiled a plan to create a special $20-millionhumanitarian assistance fund for the nine member countries of the Association of Southeast Asian Nations.

Obuchi called it a "solidarity fund" to develop human resources, alleviate poverty and identify business projects in Asean countries worst hit by the 10-month-old economic crisis.

As the crisis would be hardest on society's most vulnerable groups -- the poor, the old, the disabled and women and children -- Japan wants to build on its efforts to help these groups, he said.

Obuchi called on all Asian countries to work together to solve the crisis to "make the 21st century a century of peace and prosperity".

He said Japan's military ties to the United States were part of this vision of the future, as was the Asean Regional Forum, enhancingdialogue with China, and strengthening cross-regional economic organisations like the Asia-Pacific Economic Cooperation group and the Asia-Europe Meeting.