The Finance Ministry on Tuesday dismissed some local market analysts’ view that the Group of 20 countries recently reached a consensus not to tackle the Japanese yen’s weak position.
“The G20 communique (drawn up by finance ministers in Washington, D.C., over the weekend) does not involve any common consent that the members would tolerate the cheap yen,” Finance Ministry’s international finance policy director Choi Hee-nam told a news briefing.
Concerning arguments that the G20 members did not criticize Japan’s alleged policy toward the weaker currency on the communique, Choi stressed that “it is not easy to reprimand a particular member as the communique is completed by the full approval of each member (including Japan).”
He said the G20 seemingly clarified that Tokyo should not use the monetary easing as a tactic to boost the country’s exports by artificially depreciating the yen’s value against major currencies but instead to only vitalize domestic demand.
He added that the G20 countries’ stance could be read from recent remarks of U.S. Treasury Secretary Jack Lew, who said the country will be “vigilant” toward the Japanese monetary easing.
Earlier this month in a report on exchange rates, the U.S. Treasury Department said it will press Japan to refrain from competitive devaluation while stopping short of accusing it of manipulating the yen.
The department ― in its report to Congress ― said that it would pressure Japan to adhere to international commitments “to remain oriented towards meeting respective domestic objectives using domestic instruments and to refrain from competitive devaluation and targeting its exchange rate for competitive purposes.”
Japan’s Finance Minister Taro Aso also said during the G20 finance meeting that Japan sided with the global fundamental principle of resisting protectionism and keeping markets open, while avoiding competitive exchange rate targets.
The communiqu said that the G20 would closely monitor any “unintended negative side effects stemming from an extended period of monetary easing.”
Meanwhile, some analysts in Korea said that the yen’s weakness was likely to continue, and Korea would need to draw up measures to cushion possible side effects as the country may face further decoupling even though the U.S. economy is headed for recovery.
By Kim Yon-se (
kys@heraldcorp.com)
