America places Japan on currency monitoring watch list
(MENAFN) The United States Treasury Department has re-included Japan on its foreign exchange monitoring list, a move that comes after Tokyo resumed interventions in the currency market to stabilize the yen's value against the United States dollar. Japan had been absent from the list since June 2023 but now joins countries such as China, Vietnam, Taiwan, Malaysia, Singapore, and Germany under scrutiny for their foreign exchange practices.
The decision to add Japan back to the monitoring list follows significant interventions where Tokyo spent 9.8 trillion yen (approximately USD61.6 billion) between April and May this year. These measures were aimed at halting the yen's rapid depreciation after it hit a 34-year low of 160.245 per United States dollar on April 29.
According to the Treasury Department's biannual report released on Thursday, Japan, along with Germany, Taiwan, and Vietnam, met the criteria for inclusion due to their substantial trade surpluses with the United States and notable current account surpluses. Japan recorded a trade surplus of USD62.4 billion with the United States last year and a global current account surplus of 3.5percent of GDP in 2023, up from 1.8percent in the previous year.
Countries are added to the watch list if they meet at least two of three criteria: a trade surplus with the United States exceeding USD15 billion, a global current account surplus exceeding 3percent of GDP, and persistent one-sided net foreign exchange purchases amounting to at least 2percent of GDP over a 12-month period.
The Treasury Department's action reflects ongoing concerns about currency manipulation and its potential impact on trade dynamics between major global economies, underscoring the importance of fair and transparent foreign exchange policies in maintaining international economic stability.
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