President Clinton had great hopes that Mr Hosokawa could finally make progress in opening up the Japanese market to foreign exports.
The American ambassador to Tokyo, former vice-president Walter Mondale, publicly mourned Mr Hosokawa's demise. 'Here is a guy who offered a new Japan,' he said. 'There was such hope.'
Washington is now worried that progress towards reform will be halted by a long period of political stalemate in Japan as the ruling coalition searches for a new leader. Foreign Minister Tsutomu Hata emerged yesterday as the front-runner. But although he is also committed to political change, he may not be acceptable to the socialists in the coalition.