Japan urges caution over Trump’s complaint on strong dollar
Japan should be careful about recent remarks by US President Donald Trump on currencies and might need to convince Washington its monetary easing is not aimed at weakening the yen but beating deflation, a finance ministry official said on Saturday.
The US dollar fell the most in three weeks on Friday against a basket of six major currencies after Trump complained again about the greenback’s strength and about Federal Reserve interest rate rises.
The US president also lamented the strength of the dollar and accused the European Union and China of manipulating their currencies.
Trump is not trying to influence currency markets, Treasury Secretary Steven Mnuchin has said, reiterating that a strong US dollar reflects a strong US economy and is in the United States’ long-term interest.
“This time, the targets are China and the European Central Bank. But the content of criticism is the same so we need to be careful,” the Japanese official said in the Argentine capital.
The Bank of Japan has pursued an aggressive monetary stimulus to achieve its elusive 2% inflation target.
Despite five years of massive money printing, inflation has struggled to accelerate but the yen has steadily weakened.
China is the primary target, however, as Beijing accounts for the “bulk of the US trade deficit”, Japanese Finance Minister Taro Aso said.