Finance diplomat rejects 'currency war' criticism

Politics Jan. 25, 2013 - 07:20AM JST ( 9 )

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herefornowJan. 25, 2013 - 09:21AM JST

“It shouldn’t be criticised even if a monetary policy—which aims at ensuring growth and price stability of any country—has a certain impact on exchange rates as a consequence,” he was quoted as saying

So does that mean that what China does to keep their currency under-valued cannot be critisized? I doubt the U.S. would agree with this sentiment.
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DogJan. 25, 2013 - 09:59AM JST

herefornowJan. 25, 2013 - 09:21AM JST

So does that mean that what China does to keep their currency under-valued cannot be critisized? I doubt the U.S. would agree with this sentiment.

China is allowing its currency to rise, controlling its rise admittedly, but allowing it to rise, while it restructures its economy away from an export driven economy to a domestic consumption led economy. China has had 5 years to do this and will probably need another 5 years before it succeeds.

Japan has had 35 years to restructure its economy in a similar manner, often manipulating its currency during those 35 years and promising the G7 it would make the structural economic reforms needed.

Japan was even helped in the 2001 - 2005 period in weakening its currency by its G7 partners, again with the promise that it would restrucure its economy. However Japan did squat during that cheap yen period and even changed the goalposts by claiming Y125 to the dollar was the post Plaza norm exchange rate.

The present currency manipulation by Japan is like so much that the LDP does, a step back, a way to avoid the reforms that Japan needs.

Can you now see the difference between China and Japans' present currency policies? Another difference is that China will succeed and we will probably have another 400,000,000 consumers of products from I Pads to BMWs. Japan will not succeed. It will begger their Asian neighbours and antagonize their G8 partners and still domestic consumption in Japan will go down because of population decline and higher costs of living.
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globalwatcherJan. 25, 2013 - 11:11AM JST

The present currency manipulation by Japan is like so much that the LDP does, a step back, a way to avoid the reforms that Japan needs.

and still domestic consumption in Japan will go down because of population decline and higher costs of living.

You hit a nail as always, Dog.

German PM Merkel also released her statement at Davos International Economic Forum today addressing EU to do the same economic structural change and was encouraging all EU members to start producing very innovative products that everyone needs for Consumption Spending. This is where quality of education and R&D play very critical role for job growth.

The finance minister of Brazil today openly stated that they might to do the same if Japan can get away with currency devaluation. The Wall Street Journal is already alarming the world is heading to a currency war too. When everyone else is devaluating their currencies, then the devaluation of yen has no positive effect for exporting business while BOJ keeps printing money to worthless paper. I believe the LDP is not thinking ahead. What Japan needs is a solid economic restructuring reform that you and I have been advocating on JT.
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edojinJan. 25, 2013 - 12:23PM JST

I tend to disagree with the vice minister of finance for international affairs. Sounds as if he is a spokesman supporting Abe's monetary policies. There's no reason for the yen to be acting the way it is ... except for some backroom manuevers by the LDP financial wizards. No matter what ... the yen is doing things it's not supposed to be doing considering the current economic picture.
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humanrightsJan. 25, 2013 - 01:25PM JST

Abe is corrupt, its obvious.he will lead JP into disaster once again.
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herefornowJan. 25, 2013 - 08:36PM JST

Dog -- nice lecture, but you missed the point of my post. It was what is called a "rhetorical question"?
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issa1Jan. 26, 2013 - 09:23PM JST

All countries manipulate their currencies and why Japan should not do it?
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Kent McgrawJan. 27, 2013 - 09:06PM JST

@humanrights Abe is corrupt. All politicians are corrupt, that is their nature. While I do not think his financial policies are correct he is correct in some things, he saw that Japan needs to not rely upon the USA which is correct because Obama will dump Japan as soon as Japan becomes inconvenient. The monetary policies of Japan have been terrible for over 30 years, it is not just the party or Abe it is the Japanese system. there are many things to look at with a politician and they will not meet everyone's desires. when lookng at a politician it is always the lesser of two evils.
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Kent McgrawJan. 27, 2013 - 09:41PM JST

Think about this with the current thought that inflation is good. I loan you 1 USD which was 78 yen and now we inflate the yen to meet the USD. Who won? Now the the US has to pay a 1:1 instead of 1:0.78. Japan loses.