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The Treasury Department said Friday that Japan and China remain on a list of countries it monitors over potentially “unfair” currency practices, but refrained from labeling any major U.S. trading partner as a manipulator.

In a semiannual report to Congress on currency manipulation, the department also called China an “outlier” among major economies, citing its failure to publish foreign exchange intervention data and a broader lack of transparency around key features of its exchange-rate mechanism.

“The activities of state-owned banks in particular warrant Treasury’s close monitoring,” the report said.

The department assesses whether a country has manipulated its currency exchange rates to gain unfair trade advantage through three criteria — the size of trade surplus with the United States, the size of current account surplus as a share of gross domestic product and the extent of intervention in foreign exchange markets.

The latest report pointed out that Japan has met two of the three criteria in every report since April 2016, and currently has “material current account surpluses combined with significant bilateral trade surpluses with the United States.”

Japan’s current account surplus rose to 3.5% of GDP over the year ending June 2021 from 2.9% in 2020 on higher goods exports. The goods and services trade surplus with the United States was $57 billion, up 26% from the same period in 2020, according to the report.

Japanese monetary authorities, meanwhile, have not stepped into the foreign exchange market to weaken the yen against the U.S. dollar and other major currencies since 2011. The yen’s rise adversely impacts the profits of Japanese exporters when their revenues are repatriated.

In addition to Japan and China, 10 other U.S. trading partners constituted the “monitoring list” for special attention — Germany, India, Ireland, Italy, Malaysia, Mexico, Singapore, South Korea, Thailand and Switzerland.

Switzerland was newly added to the list, having been removed from its earlier listing as a currency manipulator in the previous report in April.

The December report also said Vietnam and Taiwan met all the criteria to be deemed currency manipulators. But the Treasury Department refrained from actually labeling them as such, noting that efforts are underway to address U.S. concerns.

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