Trump Asserts Japan and China Must Halt Currency Devaluation Practices
U.S. President Donald Trump declared that Japan and China must stop devaluing their currencies, labeling it unjust to American manufacturers. He suggested tariffs as a solution to offset the disadvantages faced by U.S. businesses. Trump’s remarks prompted market fluctuations, specifically affecting Japan’s stock market and the yen’s value, while Japanese officials reiterated their commitment to stable currency policies.
On March 4, 2025, U.S. President Donald Trump asserted that Japan and China cannot persist in devaluing their currencies, calling it unfair to the United States. He stated during a press briefing at the White House, “You can’t do it because it’s unfair to us. It’s very hard for us to make tractors, Caterpillar here, when Japan, China and other places are killing their currency.” Instead of frequent complaints, Trump indicated that the United States should address the disadvantage faced by its manufacturers by imposing tariffs.
Trump’s remarks led to a decline in Japan’s Nikkei share average by over 1% on the following day, with the yen slightly rising to 149.11 to the dollar—the highest level since late February. This reaction demonstrated the potential risks Japan’s export-driven economy faces amidst uncertainties surrounding U.S. currency and tariff policies. In response to Trump’s comments, Japanese Finance Minister Katsunobu Kato stressed that Tokyo does not have policies designed to deliberately weaken the yen.
Kato reaffirmed Japan’s stance on currency policy, stating that Japan coordinates with G7 allies and engages in discussions with U.S. Treasury Secretary Scott Bessent. Concurrently, Economy Minister Ryosei Akazawa noted that Japan typically intervenes in currency markets only during speculative movements. Japanese officials remain wary of market volatility that could arise from Trump’s explicit remarks regarding the yen, which could complicate Japan’s economic recovery efforts.
In a recent agreement, Prime Minister Shigeru Ishiba conveyed his alignment with Trump on allowing finance ministers to handle foreign exchange-rate matters. While a weaker yen supports Japanese exports, the government has intervened to stabilize the yen and avoid drastic fluctuations that would inflate import costs and negatively impact consumer spending. Japan’s chief currency diplomat, Atsushi Mimura, acknowledged that the yen’s recent uptick reflects the country’s strong economic fundamentals.
Trump’s criticism regarding the weak yen and his tariff threats may create challenges for the Bank of Japan in deciding when to implement interest rate increases. The central bank concluded a prolonged stimulus policy last year, aiming to support a sustainable economic recovery. With inflation consistently surpassing its 2% target for the past three years, the Bank of Japan is expected to raise rates further, with most economists anticipating an increment in the near future.
In summary, President Trump has firmly communicated to Japan and China that their currency devaluation practices must cease, as it undermines American manufacturing. His comments have resulted in immediate market reactions while Japan’s officials strive to maintain currency stability. Furthermore, the implications of Trump’s stance on tariffs and currency policies may complicate Japan’s economic recovery and future interest rate adjustments.
Original Source: indianexpress.com
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