“South Korea’s newly-appointed finance minister, Hyun Oh Seok, urged international cooperation to tackle a “weak-yen problem” and said that the Group of 20 nations should revisit the issue.
“Japan’s expansionary policies are having various ripple effects on many countries,” Hyun told reporters yesterday in Bundang on his second day as finance chief. “The yen is depreciating while the won is gaining and this is flashing a red light for Korea’s exports.”
Japan’s new central bank Governor Haruhiko Kuroda is poised to boost monetary easing as part of a campaign against deflation, which has already driven down the yen by about 11 percent against the dollar in the past three months. Hyun’s comments revive concerns that his nation aired before and after last month’s G-20 meeting in Moscow, where that organization refrained from criticizing Japanese policies.
“While we will do what we can, we need international cooperation to deal with the weak-yen problem,” Hyun told reporters yesterday. “This should be discussed at the G-20.”
South Korean officials are concerned at the yen’s slide because the nation depends on exports for economic growth and competes in overseas markets with Japanese manufacturers of cars and electronics. At the Moscow meeting, G-20 nations pledged not “to target our exchange rates for competitive purposes,” without any censure of Japan for the yen’s decline.
Japan’s government says it is not targeting the yen, with declines in the currency a side-effect of efforts to end deflation and spur a sustained recovery in the world’s third- biggest economy.
