US Dem Lawmakers Raise Concerns Japan May Soon Devalue Yen
25 Februar 2009 - 8:07PM
Dow Jones News
A top U.S. House Democrat is warning of signs that Japan is
considering steps to devalue its currency, a move that could hurt
the ailing U.S. auto industry, and he urged President Barack Obama
to step up pressure on the Japanese government.
House Financial Services Chairman Barney Frank, D-Mass., echoing
concerns of U.S. auto makers and their congressional allies, called
on Obama this week to pressure Japan to resist the temptation to
devalue the yen.
Japan is facing increasing pressure from its industries to
devalue the yen to stimulate Japanese exports "at the expense of
the U.S. and other economies," Frank and Rep. Sander Levin,
D-Mich., chairman of the House trade subcommittee, wrote in a
letter to Obama this week. The U.S. congressmen added that recent
statements by "several senior Japanese officials" indicate Japan is
considering such a move.
"These statements are deeply disturbing, given the fragility of
the global economy today and Japan's recent history of massive
currency market interventions," the U.S. lawmakers wrote.
While calling the U.S. and Japan "close friends and key allies,"
Frank and Levin urged Obama to send a strong message to Japanese
Prime Minister Taro Aso about the importance of market forces in
determining exchange rates.
Obama and Aso met at the White House on Tuesday. A White House
spokeswoman did not immediately respond to a request for comment
Wednesday.
U.S. auto makers have heavily lobbied the U.S. government to
take a tough stance against Japan on possible currency
manipulation. Cars are one of Japan's top exports, and auto makers
argue the U.S. auto industry would be further crippled by any
attempts by Japan to devalue the yen.
"It is something that is a very high concern," said Steve
Collins, president of the Automotive Trade Policy Council, an
association representing General Motors Corp. (GM), Ford Motor Co.
(F) and Chrysler LLC. "The magnitude of the impact would equal or
certainly challenge the impact of the stimulus (package) and the
loan request that the auto companies have sought and secured from
the government to get through this slump."
Michigan's two Democratic senators, Debbie Stabenow and Carl
Levin, wrote to Treasury Secretary Timothy Geithner and National
Economic Council Director Lawrence Summers urging them to fight any
attempts by U.S. trade partners, including Japan, to manipulate
currency rates.
Lowering a currency's value, they said, would provide a
"subsidy" to a particular country's firms, "enabling them to
undercut American businesses and workers," the senators wrote.
-By Josh Mitchell, Dow Jones Newswires; 202-862-6637;
joshua.mitchell@dowjones.com