	japan says u s japan microchip pact working japanese officials sought to convince the u s that a u s japan pact on microchip  is working ahead of an april deadline set by the u s for them to prove their case we are implementing the agreement in good faith and the situation does not run counter to the pact osamu watanabe director of the ministry of international  and industry s miti americas and oceanic division told foreign reporters the effects of the measures we have taken and are taking are emerging in the market place he said u s  officials have repeatedly accused japanese microchip makers of violating the pact by continuing to sell at below cost in markets outside japan and the united states the agreement signed last september aimed at halting predatory japanese pricing policies and increasing u s semiconductor firms access to the japanese market the comments by miti officials followed a call by prime minsiter yasuhiro nakasone to clear up any misunderstandings on the u s side about the pact watanabe said yukio honda director of miti s industrial electronics division denied that japanese chipmakers were selling at below cost in third countries miti s call to japanese chip makers last month to cut production of key memory chips in the first quarter of this year has begun to dry up the source of cheap chips for sale in the non regulated grey market honda said the grey market exports from japan are shrinking now but in contrast u s and south korean companies are expanding market share because of their cheaper prices honda said miti plans to take further steps to reduce the excess supply of inexpensive chips which developed in japan after the pact was formed because of a slump in japanese semiconductor exports to the united states he added the ministry will soon release its supply demand guidelines for the second quarter and suggested production volumes are likely to be lower than that for the first quarter he said despite businessmen s ingenuity in finding ways around any artificial controls regulation of supply and demand should bring positive results watanabe said i am optimistic he added reuter 
