Currency Wars: US warns China, Japan and S Korea

Taking a surprise aim at Tokyo, the Treasury raised questions about Japan’s effort to reflate its economy.


Afp April 14, 2013

WASHINGTON: The United States (US) on Friday said China’s currency remains “significantly undervalued” and warned Japan and South Korea against weakening their currencies to gain a trade advantage, in a bi-annual finding by the Congress on exchange-rate policies. Taking a surprise aim at Tokyo, the Treasury raised questions about Japan’s effort to reflate its economy, a move that has sent the yen sharply tumbling to its lowest level since May 2009. The Treasury said that Japan’s macroeconomic stimulus would be supportive in the short term “but cannot be a substitute for structural reform that raises productivity and trend growth.” In the face of congressional critics of China’s huge bilateral trade advantage, the Treasury declined to officially brand Beijing a currency manipulator, a move that could spark US trade sanctions, but still mentioned that the Chinese currency is underpriced.

Published in The Express Tribune, April 14th, 2013.

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