Date
18 January 2017
Finance Minister Taro Aso said Japan is on guard against any attempts by China to manipulate the renminbi to give its exports an edge. Photo: Bloomberg
Finance Minister Taro Aso said Japan is on guard against any attempts by China to manipulate the renminbi to give its exports an edge. Photo: Bloomberg

Japan cautions China against frequent currency manipulation

Japanese Finance Minister Taro Aso on Friday warned China against frequent manipulation of its currency, saying that Tokyo would face a tough decision on how to respond to such interventions from Beijing.

Aso urged China to continue shifting its currency market towards a market-oriented system, Reuters reported.

In a move that shook global financial markets, China last week devalued the yuan by nearly 2 percent.

The action, coming on top of a slew of gloomy data including soft exports and slumping wholesale prices, heightened concern over the strength of the world’s second-largest economy.

Aso said Japan welcomes the move if it was part of Beijing’s efforts to make its currency system a market-based one.

But he warned that Japan was on guard against any attempts by China to manipulate the renminbi to give its exports a competitive advantage.

“Japan would face a tough decision on how to respond if China intervenes frequently in the market,” he told a news conference after a regular cabinet meeting.

Aso said China’s economic slowdown was undoubtedly a big factor behind the declines in global stocks, including a near 2 percent fall for Japan’s benchmark Nikkei average on Friday morning.

“We must scrutinize various data to see if China’s economy is indeed expanding at a pace of 7 percent,” he said.

Japanese policymakers have been keeping a wary eye over Beijing’s handling of the country’s market turmoil.

China is a major trading partner of Japan, and any negative impact on the Asian economic powerhouse is expected to knock Japanese exporters, the report said.

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