The United States has added Japan to its "monitoring list" of major trading partners whose currency practices "require special attention," AFP reported.
The Treasury's six-monthly report looks at countries with large trade surpluses that actively intervene in foreign exchange markets to gain trade advantages.
Japan meets two of the three criteria required for an "extended analysis", namely "having a significant current account surplus and a significant bilateral trade surplus with the US". But it is considered that Tokyo does not meet the third criterion - "participation in permanent unilateral intervention in the foreign exchange market".
Japan joins China, Japan, Taiwan, Malaysia, Singapore, Vietnam and Germany on the watch list. None of them met all three criteria for extended analysis.
"None of the US's major trading partners manipulated the exchange rate between their currency and the US dollar in order to prevent effective balance of payments adjustments or obtain an unfair competitive advantage in international trade during the four quarters through December 2023," it said. in the statement of the Ministry of Finance.
The decision for Japan comes after authorities there began intervening in currency markets in April to support the sinking yen, which has fallen from around 115 to the dollar before Russia's February 2022 invasion of Ukraine to almost 160.
This was partly due to the Bank of Japan's decision to keep interest rates ultra-low while other central banks raised theirs.
Since then, authorities have spent about $62 billion to help prop up the Japanese currency, according to government data released late last month. I BGNES
