The United States Adds Japan to Currency Monitoring List
WASHINGTON — The United States has added Japan to its “monitoring list” of major trading partners whose currency practices “merit close attention.” The Treasury Department’s semi-annual report assesses countries with significant trade surpluses that actively intervene in foreign exchange markets for trade advantages.
Japan met two out of three criteria for “enhanced analysis” in the report, including having a material current account surplus and a significant bilateral trade surplus with the United States. However, Japan was not found to engage in persistent one-sided intervention in the foreign exchange market.
Japan now joins China, Taiwan, Malaysia, Singapore, Vietnam, and Germany on the monitoring list, with no country meeting all three criteria for enhanced analysis. The Treasury Department stated that no major US trading partner manipulated the exchange rate between its currency and the US dollar for unfair trade advantages.
The addition of Japan to the list comes after authorities in Japan intervened in currency markets to support the weakening yen, which dropped significantly after Russia’s invasion of Ukraine in February 2022. The Bank of Japan’s decision to maintain low interest rates while other central banks raised theirs contributed to the yen’s decline. Japanese authorities have spent approximately $62 billion to support the Japanese currency since April.
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