Criticism in the U.S. over recent Japanese acquisitions is looming ever larger in the two countries' relations.

Officials from both nations say the U.S. public's skittishness about Japanese investment could color a second round of bilateral economic talks scheduled for next week in Washington. Not that Washington and Tokyo disagree on the Japanese acquisitions; indeed, each has come out in favor of unfettered investment in the U.S.

Where they disagree is on the subject of U.S. direct investment in Japan. The U.S. wants the removal of what it perceives as barriers to investment; Japan denies there are real barriers. The heated talk stirred up by recent Japanese investments in the U.S. is focusing attention on the differences in investment climate, even though it's only one of many subjects to be covered in the bilateral talks, known as the Structural Impediments Initiative.

The Japanese "should see this rhetoric as a signal of the need for a change in their own economy," says Charles Dallara, U.S. assistant Treasury secretary, who has been in Tokyo this week informally discussing the impending negotiations with government and business leaders.

"We have a long history of maintaining an open direct-investment policy," Mr. Dallara says. "U.S. investors should have a greater opportunity at direct investment" in Japan.

The Japanese fret openly about the U.S. public's rancor. One clear sign of Japan's nervousness came this week, when a spokesman for Japan's Foreign Ministry devoted nearly all of a regular, half-hour briefing for foreign journalists to the subject of recent Japanese investments in the U.S.

"We believe that it is vitally important for those Japanese business interests {in the U.S.} to be more aware of the emotions and concerns of the American people," said the spokesman, Taizo Watanabe. At the same time, though, he chastised the media for paying such close attention to Japanese investment when other foreign countries, notably Britain, are acquiring more American assets.