Japanese officials rejected the assertion by President Donald Trump that Tokyo is using its monetary policies to weaken the yen against the US dollar to gain a trade advantage. Government spokesman Yoshihide Suga said today that Trump’s comments, made in a meeting with executives of pharmaceutical companies, “completely misses the mark.”
“Our monetary easing policy is intended to stabilise prices, not to weaken the yen against the US dollar,” Suga said.
Prime Minister Shinzo Abe is due to meet with Trump in Washington on Febuarary 10. Suga told reporters Japan plans to explain its stance on the issue.
During the meeting with pharmaceutical industry leaders, Trump complained about drug makers shifting production overseas and said his trade policies would end unfair “global freeloading,” according to a transcript of the meeting. He blamed regulations and devaluation by other countries. “Every other country lives on devaluation,” he said.
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“You look at what China’s doing, you look at what Japan has done over the years. … They play the money market, they play the devaluation market and we sit there like a bunch of dummies.” After Trump’s comments, the dollar weakened sharply against the yen. But by midday Wednesday in Asia, it was at 113.00 yen, slightly above its previous close of 112.94 yen.
The yen’s value fell steadily after the Bank of Japan implemented massive monetary easing four years ago, hoping to spur inflation and stimulate economic activity. By injecting massive amounts of cash into the economy, the central bank caused the yen’s value to fall from about 80 yen to the dollar to a low of about 125 yen to the dollar in mid-2015.
Recently, the dollar has gained against other currencies, partly because the Federal Reserve is gradually raising interest rates and partly because investors are betting on bigger returns from investments under Trump’s administration.
The dollar was trading near 100 yen in August but now stands at about 113 yen.