politics

Japan braces for Trump assault on trade, yen policy as summit looms

41 Comments
By Leika Kihara and Tetsushi Kajimoto

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41 Comments
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Japan would have nothing to brace for if its trade policies were fair. Japan is realizing that taking advantage of the US is about to end, THAT is what they are bracing for.

1 ( +17 / -16 )

"As mid-term elections draw near, it's possible Washington could put Japan's currency policy to notice," 

this is a euphemism for currency manipulation. Japan is the #2 master at it, behind China

-1 ( +15 / -16 )

this is a euphemism for currency manipulation. Japan is the #2 master at it, behind China

But the US is #1 at quantitative easing (which is a euphemism for?)

7 ( +17 / -10 )

We'll never allow currency issues be tied to trade. That's absolutely unacceptable."

What an idiot. currency issues have always been tied to trade. That a government official directly involved in bilateral negotiations would say that is absolutely unacceptable.

6 ( +13 / -7 )

The Yen is currently at around Y106 to the Dollar.... which to me, is a bit strong. A fair level would be around Y115 to the dollar.

9 ( +16 / -7 )

Do not beg anything to Trump when Abe meets him. Friendship does not work to him. Trump is a businessman. He speaks and behaves nice to people he meets but he is a man who thinks "Business is business."

6 ( +8 / -2 )

I think ¥125 to the dollar would be more acceptable.

1 ( +9 / -8 )

But the US is #1 at quantitative easing.

No it isn't. The US ended its program last year and started tapering 3 years before then, while Japan today has the world's most aggressive QE program. In fact, Japan invented modern QE 18 years ago.

5 ( +11 / -6 )

But Japan does not have " weak yen policies". Abe and Aso have been repeating ad nausea for the last few years that a weak yen is not a policy to help J inc but an innocent by product of their fight against the all evil deflation boogeyman ( which the average Taro loves btw ) . No way the two A san,s could have been bs -iting all this time again, could they?

. "We'll never allow currency issues be tied to trade. That's absolutely unacceptable.

Funniest statement in the whole article...what parallel world is this bureaucratic genius living in?

11 ( +12 / -1 )

Some officials say Japan is in a stronger position than South Korea and won't have to compromise as much. That is because it still does not have a bilateral FTA, is transparent on currency policy and hasn't intervened in the currency market since northeastern Japan was hit by a massive earthquake and resulting tsunami in 2011.

This is absolutely right. Japan shouldn't give an inch. Trump unilaterally raises steel/aluminum tariffs to give himself an extra bargaining chip so he can strong-arm his allies. Forget that!

4 ( +5 / -1 )

Japan always behaves obsequious to U.S. while China's attitude to U.S. square and stately.

5 ( +7 / -2 )

Asia is better off without America then. Might as well tell Trumpy to sling his hook, and South Korea, China, Japan and co can all kiss and make up and form the A.U.

1 ( +3 / -2 )

"The biggest risk is if Trump links trade with currency policy and accuses Japan of keeping the yen artificially weak through ultra-easy monetary policy..."

I don't understand what it means, better to understand where is the place in the world to imbalance currency policy: Isn't that Wall-Street (the biggest world financial Stock Market) in USA? Is that going to be Trumpland?

3 ( +4 / -1 )

If Abe can get away from the scandal, this is a small cake for him.

-3 ( +1 / -4 )

the biggest currency manipulation of alltime was the Plaza Accord of the 80s that was forced onto Japan by the USA, Japans economy has never been the same since. Any negotiations on currency manipulation should include all G8 countries, rules need to be set, if any country violates those rules then all bets are off, and this includes the USA.

4 ( +7 / -3 )

Trump seems to forget that Japanese car manufacturers employ a lot of americans, approx 1.3 million, also Earlier this month, -- Trump praised Toyota and Mazda Motor Corp.’s $1.6 billion joint car factory planned for a still-undecided U.S. site. Those projects add to the $45.6 billion in cumulative investment that Japan Automobile Manufacturers Association members have made in the U.S. through 2016. -- plus how many other jobs Japanese firms create in the US. I think trump should be careful not bombastic when discussing trade tariffs. The Japanese government and it business lobby have to be strong and stand up to Trump, he only wins by bullying and making threats, and has twitter tantrums when something doesn't go his way, just play him at his own game Japan, you have nothing to lose.

7 ( +8 / -1 )

The Yen is currently at around Y106 to the Dollar.... which to me, is a bit strong. A fair level would be around Y115 to the dollar. yes considering the state of both economies that would be a fair assessment, Trumps seems to think America can have a strong economy but keep its currency low at the same time, add to this the unfair labeling of the yen as a safe haven currency whenever there are market jitters. America is the biggest manipulator of them all whether directly or indirectly. Whatever currency conditions that is forced onto Japan by Trump, Japan should demand USA to follow the same rules before accepting anything.

2 ( +4 / -2 )

Japan invented modern QE 18 years ago. No the US invented it and forced it onto Japan as the Plaza Accord, Basically screwed Japan overnight

2 ( +5 / -3 )

currency issues have always been tied to trade.

Trump is the one failed to declare China a currency manipulator.

He speaks and behaves nice to people he meets but he is a man who thinks "Business is business."

Then what happened on Trump's China visit?

2 ( +5 / -3 )

currency issues have always been tied to trade.

Trump is the one failed to declare China a currency manipulator.

I'm not talking about that. I'm talking about the fact that someone would say that the two can be separated. They can't.

China is a currency manipulator. So is Japan.

1 ( +2 / -1 )

Not to worry, for he is easily outwitted -- as China has shown!

1 ( +2 / -1 )

I think the real problem coming in about 5 years is when interest rates rise and Japan, the US and many other countries simply are not able to tax enough to pay the interest on government debt. The currencies could collapse and new players with better demographics such as India in particular, may become ascendant. I agree that China has a lot of manufacturing oomph, but the demographics have screwed them too. Just wait.

1 ( +3 / -2 )

I think the real problem coming in about 5 years is when interest rates rise and Japan, the US and many other countries simply are not able to tax enough to pay the interest on government debt. The currencies could collapse and new players with better demographics such as India in particular, may become ascendant. I agree that China has a lot of manufacturing oomph, but the demographics have screwed them too. Just wait.

Another excellent point. China has the same problem as japan- the population inverse pyramid. Add to that the fact that the one child policy has created a huge disparity in the ratio of the sexes- there are not enough women due to the fact that everyone wants a boy.

0 ( +1 / -1 )

I'm sure a compromise will be found. Lets face it, Trump needs a win. He needs some more good news on trade. The announcements on additional U.S investments have been running very thin of late.

I personally don't think he can afford to be any sort of bully. Its amazing what an incentive elections can be to get things done.

1 ( +3 / -2 )

Japan = ATM of United States !

-7 ( +0 / -7 )

"Japan has far more to lose from a bilateral FTA. It doesn't make sense to do this to avoid tariffs," said a third government official

This shows who the protectionists are, doesn’t it. Japanese government official believes Japan will ‘lose’ through bilateral free trade with the US...

Nonsense.

The Japanese consumers would be big winners through additional choices of foreign goods at their true prices.

Lethargic Japanese producers, loath to innovate, change and produce more efficiently to compete in the absence of protections, the only losers (as well as their benefactors in government.)

Exposing this reality may prove to be the ‘genius’ of Trump’s tariffs.

3 ( +4 / -1 )

fxgai- Excellent post. Agree 100%

1 ( +2 / -1 )

China is a currency manipulator.

No, because Trump never said so. He changed his mind on China and currency manipulation and Trump's word is the word of a king when it comes to policy and everyone under him must follow.

0 ( +1 / -1 )

@wtfjapan

"No the US invented it and forced it onto Japan as the Plaza Accord, Basically screwed Japan overnight"

Hello, the Plaza Accord involved intervention on currency markets. QE involves continued bond purchasing by the central bank even after the benchmark interest rate has gone near zero. Proverbial apples to proverbial oranges.

2 ( +2 / -0 )

China is a currency manipulator.

No, because Trump never said so. He changed his mind on China and currency manipulation and Trump's word is the word of a king when it comes to policy and everyone under him must follow.

トンチンカン 頓珍漢 you’re just talking about something else but thinking you’re debating someone.

Original post to which you responded linked currency to trade; yours is on whether or not Trump followed up on what he said he was going to address.

1 ( +1 / -0 )

The Japanese consumers would be big winners through additional choices of foreign goods at their true prices.

That sounds more like a description of TPP, which involves multiple foreign countries, and of which Japan is a member but the US is not.

You mean American goods.

1 ( +1 / -0 )

Not sure that is really true of the TPP, I have the impression that the TPP would enable Japan to take a very, very long time to remove trade barriers under it.

Go to a true free trade deal straight away and Japanese consumers could benefit from choices much sooner than under TPP.

0 ( +1 / -1 )

Social business will balance this in equality

-1 ( +0 / -1 )

So a round of golf between Trump and Abe is now called a summit?

-2 ( +0 / -2 )

Go on the internet and take a look at what Japan taxes American beef, wheat and rice- plus freight, insurance and 4 levels of 8%.

0 ( +1 / -1 )

No, because Trump never said so.

Great. So now you believe what trump says. I've got a bridge I'd like to sell you.

-3 ( +0 / -3 )

トンチンカン 頓珍漢 you’re just talking about something else but thinking you’re debating someone.

exactly.

Original post to which you responded linked currency to trade; yours is on whether or not Trump followed up on what he said he was going to address.

Exactly right.

-3 ( +0 / -3 )

In point of fact, because oil and many other commodities are priced in dollars, and non-US countries have to exchange their own (or other) currencies into USD to purchase oil, the US can be said to recieve the world's largest benefit from artificial currency manipulation; the strength of the USD is largely due to the articicial demand for the greenback needed to purchase oil. There is more than one way to manipulate a currency.

0 ( +1 / -1 )

I wish you goodluck when your golf playing with Trump! That might save your country……Mr.Abe!

0 ( +0 / -0 )

the strength of the USD is largely due to the articicial demand for the greenback needed to purchase oil

I think that’s in a different league to direct currency intervention and money printing.

If global oil traders demand to settle in renminbi they can arrange to do that.

1 ( +1 / -0 )

No it isn't. The US ended its program last year and started tapering 3 years before then, while Japan today has the world's most aggressive QE program. In fact, Japan invented modern QE 18 years ago.

If you can't forget what Japan did 18 years ago, then how would you expect others to forget what the US did just before a year ago, and the years before that.

0 ( +0 / -0 )

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