Business / Economy

Finance chiefs should handle currency issues, Taro Aso says after U.S. push to prevent devaluations

Kyodo

Finance Minister Taro Aso on Monday sought to fend off the U.S. demand for a provision to prevent currency devaluations, saying currency issues should be handled by finance authorities, not in bilateral trade talks.

Prime Minister Shinzo Abe and U.S. President Donald Trump have agreed to leave it to their countries’ finance chiefs to discuss currency issues, Aso said.

“It has been the case that close communications should be made at the expert level when it comes to currency issues,” Aso told reporters after a Cabinet meeting.

U.S. Treasury Secretary Steven Mnuchin said Saturday that Washington is seeking to include a provision to prevent competitive currency devaluations in any trade deal with Japan.

His comments came after Abe and Trump agreed in late September that the two countries will start negotiations for a trade agreement on goods.

Toshimitsu Motegi, Japan’s minister in charge of bilateral trade talks, responded Sunday that Tokyo has no intention to discuss measures to prevent competitive devaluations.

Perception gaps between the two governments have also emerged on what they will pursue in the bilateral trade talks.

U.S. Vice President Mike Pence has described an envisaged trade deal with Japan as a “free trade agreement,” while Tokyo has asserted that any bilateral accord will not be as comprehensive as an FTA.

Trump has taken issue with the massive U.S. trade deficit with Japan and has been seeking to fix it in a bilateral way. Japan had sought a multilateral approach to trade issues.

Mnuchin’s remarks weakened the U.S. dollar against the yen in Tokyo on Monday as Washington is widely seen as being concerned about a strong dollar that makes U.S. products less competitive abroad.