“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 in a report on exchange rates.
The Treasury will 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,” the department said in its semi-annual currency report to Congress released in Washingtonyesterday. The report also declined to name China a currency manipulator.
“This is a shot across the BOJ’s bow,” Kit Juckes, a global strategist at Societe Generale SA inLondon, said in an e-mail. “Everyone still supports Japan’s fight against deflation, but the U.S. would much rather the yen did not weaken significantly further.”
The Bank of Japan (8301) surprised markets on April 4 by doubling monthly bond purchases to almost match the Federal Reserve’s monetary easing, and by setting a two-year horizon for achieving its goal of 2 percent inflation. BOJ Governor Haruhiko Kuroda said yesterday there’s no time limit to the stimulus.
The Bank of Japan and Japanese Finance Ministry didn’t answer phone calls today byBloomberg News.
The yen has depreciated against all 16 of its most-traded peers since April 4, declining 2.2 percent to the U.S. dollar, 3.5 percent to Europe’s 17-nation common currency and 2.8 percent to Australia’s dollar.
