US President Donald Trump has accused Japan of deliberately lowering the yen, and has indicated that new tariffs on Japanese goods will be imposed if the practice persists. At a White House press conference, Trump accused both Japan and China of currency manipulation to gain an unfair advantage over the U.S. economy.
“Tarrifs is the easiest way to solve that problem,” Trump said, pointing out that he has informed the Japanese and Chinese leaders against taking measures to depreciate their currencies. He noted that while tariffs were not the only option, they were the simplest, quickest and cheapest’ to level the playing field.
Japan’s Finance Minister Katsunobu Kato dismissed Trump’s allegations and countered that Tokyo was not purposefully depreciating the yen. He argued that over the past two years, the Japanese government and the Bank of Japan have actually worked to support the yen’s value, not to depress it.
Kato also shared that he has spoken with U.S. Treasury Secretary Scott Bentsent and expected common sense from the new administration in Washington to respect Japan’s fair play in its currency management.
The yen rose against the dollar after Trump’s comments, with the exchange rate moving below ¥150 per dollar for the first time in Tokyo trading. Nevertheless, worries about new tariffs and trade conflict affected the regional markets.
Trump’s approach to currency policies has also sent shock waves through emerging Asian economies with the Thai baht and South Korean won coming under pressure. The Bloomberg sovereign-credit index of Asian currencies sank 0.8 per cent on Monday as Trump announced tariffs on China, Mexico and Canada.
As the fear of trade war rises, analysts predict that Asian currencies may become more sensitive to fluctuations, particularly if the US escalates its tariff threats towards the region.
