Japan on Wednesday denied Donald Trump’s accusation Tokyo “played the money market” to give it an unfair trade advantage, with Prime Minister Shinzo Abe saying the claims of currency devaluation were untrue.
The remarks, which also targeted China, are the latest by the tycoon against the United States’ global partners and come just before a meeting with Abe in which trade is expected to top the agenda.
In a speech to business executives at the White House Trump, he said: “You look at what China is doing and what Japan has done over the years, and they played the money market and the devaluation market and we sit there like a bunch of dummies.”
The comments sent the dollar plunging towards 112 yen briefly Tuesday, with traders taking them as further evidence Trump will press ahead with a protectionist agenda many fear could spark a global trade war.
Questioned in parliament about the outburst, Abe, with a diplomatic eye on next week’s meeting, said: “We have tasked the Bank of Japan under Governor (Haruhiko) Kuroda with an appropriate monetary policy to achieve the two percent price-stability goal.
“We have repeatedly said their criticism that we are guiding the yen lower is not true.”
However, chief government spokesman Yoshihide Suga was a little more forthcoming saying the comments were “completely off the mark”.
Suga, a key Abe ally, noted that Group of 20 members had agreed to avoid currency depreciation as a policy tool.
“Foreign exchange rates are moving in line with the current and mid-to-long term economic situation.”
Separately, senior finance ministry official Masatsugu Asakawa flat out denied Trump’s assertion.
“Foreign exchange rates are determined by the markets,” he told reporters, according to Japanese media. “We are not manipulating them.”
He added: “I don’t quite understand what (Trump) actually meant” and noted Japan had not intervened in currency markets for several years.
While campaigning for the presidency Trump often targeted China for destroying US jobs with its trade practices and accused Beijing of being a currency manipulator. But the dig at Tokyo suggests he is preparing for a new relationship with traditional partners.
Abe, speaking about his meeting with Trump, told lawmakers he intends to discuss “how Japan can create jobs” in the US as well as broader economic cooperation with his country’s key security ally.
He also stressed Japanese investment has greatly contributed to employment in the United States, including “1.5 million jobs in the auto industry alone”.
Trump has threatened punitive tariffs on imports into the US in a bid to force manufacturers, domestic and foreign, to produce and hire there.
He targeted Toyota in one of his fiery tweets, criticising a project to build a new factory in Mexico and threatening it with levies.
On Monday a poll in Yomiuri Shimbun, Japan’s biggest daily newspaper, found 70 percent of respondents were concerned about ties with the US under Trump.
The same percentage also believes his administration will be more negative than positive for Japan’s economy.