UPDATE:US Dem Lawmakers Raise Concerns Japan May Devalue Yen
25 Februar 2009 - 9:24PM
Dow Jones News
A top U.S. House Democrat said he fears Japan might soon give in
to pressure 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 urge Japan to resist the temptation to
devalue the yen.
Frank pointed to a recent statement by an official at Japan's
most influential business lobby group, the Keidanren, that Japanese
companies were "crying out" for the government to artificially
weaken the yen to stimulate exports of cars and other goods. Recent
statements by "several senior Japanese officials" indicate the
government may consider such an intervention, Frank and Rep. Sander
Levin, D-Mich., chairman of the House trade subcommittee, wrote in
a letter to Obama this week.
"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 didn't 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