Although the Obama administration has urged a more delicate approach, Washington's own concern over China's muscle-flexing is obvious. On Monday, Obama and Abe announced a broad new defense framework that for the first time since 1945 specifically allows Japanese forces to defend U.S. interests. On the economic front, Japan followed the United States' lead in declining to become an inaugural member of the China-led Asia Infrastructure Investment Bank (AIIB), an organization some fear is designed to compete directly with World Bank initiatives in the region.
More proactively, American officials have been pushing Japan to loosen its agricultural trade restrictions and join the new Trans-Pacific Partnership, a 21-nation free trade grouping that stretches from Australia to Chile and Vietnam. As Obama told The Wall Street Journal in an interview earlier this week: "If we don't write the rules, China will write the rules out in that region."
Ultimately, however, the only certain hedge against Chinese dominance in Asia is a healthy Japan. So far, "Abenomics"—the Prime Minister's self-styled blend of Keynesian stimuli, deregulation and a loose fiscal policy—has achieved only modest success. Wages are rising for the first time in a decade, and this month, the Nikkei stock market average hit a 15-year high. Economists are concerned that unless Japan's central bank continues to print money, however, the country will sink back into deflation.
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Most important, there is no sign of the tough agricultural and labor reforms that Abe promised. Abe is arguably the most powerful prime minister Japan has seen since the 1960s. Tokyo can look forward to the hosting the 2020 Olympics—a powerful symbolic role, since the 1964 Olympics helped launch Japan's first "economic miracle." Whatever he says to Congress this week, if Abe does not use the power he has to force change at home, Japan may indeed need a real miracle to emerge from the depths of its current despair.
—By Frank B. Gibney Jr., special to CNBC.com. Mr. Gibney is a former bureau chief for TIME and Newsweek in Tokyo and Beijing.