An American executive agreed. "The indirect impact of the Fifth Generation project should not be understated," said Mark Eaton, vice president of strategy and development at the American computer consortium. "As usual with a MITI project, it's the bandwagon effect you look at, as well as the project itself." Mr. Eaton monitored the project in a previous job at the United States Consulate in Osaka. Post-Mortem Conference

The Fifth Generation project, started in 1982, aimed to develop computers with reasoning capabilities, rather than the ability to merely perform calculations. Computers imbued with such "artificial intelligence" could be used to diagnose diseases, analyze lawsuits and understand language. With the project drawing to a close, a big conference is under way here this week to assess its results.

The Fifth Generation effort did not yield the breakthroughs to make machines truly intelligent, something that probably could never have realistically been expected anyway. Yet the project did succeed in developing prototype computers that can perform some reasoning functions at high speeds, in part by employing up to 1,000 processors in parallel. The project also developed basic software to control and program such computers. Experts here said that some of these achievements were technically impressive. No Market Appeal

But these days, few people want specialized computers for artificial intelligence, preferring powerful general-purpose machines like those made by Sun Microsystems Inc., a fast-growing Silicon Valley company that did not exist when the Fifth Generation Project was conceived. And a host of scrappy American companies have sprung up to sell massively parallel computers with tens of thousands of processors, far more than the Fifth Generation machines.

The lack of commercial interest in its technology helps account for the announcement by the Ministry of International Trade and Industry this week that it would give the Fifth Generation software to anyone, without charge.

While the ministry said it was making the unusual offer as a donation to world science, some computer scientists read the move as evidence that the project had been transformed from a strategic weapon.

"If it had really caught on, the Japanese companies would not have let it go," said Edward Feigenbaum, a professor of computer science at Stanford University who was the co-author of a 1983 book on the Fifth Generation project. While the project developed some interesting computer designs and software, he said, even in Japan "no one is using the technology."