Japanese Finance Minister Katsunobu Kato has rejected Donald Trump’s claim that Tokyo is manipulating the yen to gain an unfair trade advantage over the US. “We are not adopting a policy to weaken the (Japanese) currency. If you recall our foreign exchange market interventions in recent years, you can understand what I mean,” said Kato at a press conference on Tuesday. He added that he spoke with US Treasury Secretary Scott Bessent in January, and the two sides were in agreement in regard to foreign exchange.
Trump Accuses Japan and China of Currency Manipulation
Kato was responding to Trump’s tariff threat on Monday. “I’ve called President Xi, I’ve called the leaders of Japan to say you can’t continue to reduce and break down your currency. You can’t do it because it’s unfair to us. It’s very hard for us to make tractors, Caterpillar here, when Japan, China and other places are killing their currency, meaning driving it down,” said Trump at the White House. He added, “So all of these things add up. And the way you solve it very easily is with tariffs.”
Between the end of 2020 and the first half of 2024, the yen depreciated against the dollar by about 60%. Last year, it briefly crossed the 161 mark against the dollar for the first time since 1986. To combat the decline, the Japanese government and the Bank of Japan conducted yen-buying and yen-selling interventions in April to May and in July. Following Trump’s comments, the yen strengthened against the dollar. At around 5 p.m. on Monday, the Japanese currency was trading above the 150 mark against the greenback. By 11 a.m. the following day, it was below 149.
It’s not the first time Trump has accused Japan and China of manipulating their currencies to gain an unfair trade advantage over his country. During his first term in office, he stated that the two nations, plus Germany, were guilty of “global freeloading” in their trade deals with the US.
