The US Department of the Treasury on Thursday said no major trading partner appeared to have manipulated its currency last year, but it added Japan to a foreign exchange “monitoring list,” alongside China, Vietnam, Taiwan, Malaysia, Singapore and Germany, which were on the previous list.
The Treasury’s semi-annual currency report found that none of the countries examined met all three criteria triggering “enhanced analysis” of their foreign exchange practices during the four quarters through December last year.
Countries are automatically added to the list if they meet two of the three criteria: a trade surplus with the US of at least US$15 billion, a global account surplus above 3 percent of GDP and persistent one-way net foreign exchange purchases of at least 2 percent of GDP over 12 months.
Photo: Reuters
Japan, Taiwan, Vietnam and Germany all met the criteria for trade surpluses and an outsized current account surplus, the Treasury said.
Singapore met the criteria for engaging in persistent foreign exchange intervention and a material current account surplus; Malaysia only met the current account surplus criteria, but once on the list, it takes two currency report cycles to be dropped off.
China was kept on the monitoring list because of its large trade surplus with the US and because of a lack of transparency surrounding its foreign exchange policies.
“China’s failure to publish foreign exchange intervention and broader lack of transparency around key features of its exchange rate mechanism continues to make it an outlier among major economies and warrants Treasury’s close monitoring,” the Treasury said in the report.
The report also raises questions about China’s reporting of data on its current account balance, which showed its surplus fell to 1.4 percent of GDP last year from 2.5 percent in 2022.
The Treasury said China’s balance of payments data published by the State Administration of Foreign Exchange on the nation’s trade surplus appear to be at odds with China’s own customs data and that of other trading partners.
A US Treasury official said the department was trying to understand such “anomalies.”
The official said Japan’s recent foreign exchange interventions to prop up the yen were not a factor in deciding to add the country to the currency monitoring list.
The official cited Japan’s high trade surplus of US$62.4 billion with the US and its global current account surplus of 3.5 percent of GDP last year, up from 1.8 percent in 2022.
However, the Treasury report said that Japan had intervened in April and last year — outside the period covered by the report — for the first time since October 2022, buying yen and selling US dollars to boost the yen’s value.
The Treasury said Japan was transparent in its foreign exchange operations, but added: “Treasury’s expectation is that in large, freely traded exchange markets, intervention should be reserved only for very exceptional circumstances with appropriate prior consultations.”
Speaking to reporters on Thursday, Japan’s top currency diplomat, Vice Minister for International Affairs Masato Kanda, said he did not see a problem with Japan being included on the US currency monitoring list, adding that it was assessed according to mechanical criteria.
The report said most foreign exchange interventions last year focused on selling US dollars — actions that strengthen a currency’s value against the greenback.
The US dollar has strengthened over the past two years as the US Federal Reserve has raised interest rates sharply to cool inflation.
The greater concern in the Treasury report is on interventions to buy US dollars and thus weaken other currencies.
Packed into a small room, a drone, bipedal robot, supermarket checkout and other devices showcase a vision of China’s software future — one where an operating system developed by national champion Huawei (華為) has replaced Windows and Android. The collection is at the Harmony Ecosystem Innovation Center in the southern city of Shenzhen, a local government-owned entity that encourages authorities, companies and hardware makers to develop software using OpenHarmony (鴻蒙), an open-source version of the operating system Huawei launched five years ago after US sanctions cut off support for Google’s Android. While Huawei’s recent strong-selling smartphone launches have been closely watched for
The waves of the Aegean Sea lap gently at the tables and chairs of two beach restaurants on Greece’s Halkidiki peninsula. It is an idyllic scene, but one that is totally illegal. Like many others in Greece, the two establishments on Pefkochori Beach do not have a license to set up shop so close to the water. After a wave of protests last summer by locals about bars and restaurants illegally covering beaches with sunbeds and tables, the Greek state is taking action. It is cracking down on rogue tourist practices with surveillance drones, satellite imagery and a special app
South Korea’s SK Hynix Inc, the world’s No. 2 memorychip maker, is to invest 103 trillion won (US$74.6 billion) through 2028 to strengthen its chips business, focusing on artificial intelligence (AI), its parent SK Group said yesterday. SK Group also said it plans to secure 80 trillion won by 2026 to invest in AI and semiconductors as well as fund shareholder returns, while streamlining its more than 175 subsidiaries. The sprawling conglomerate outlined the plans following a two-day strategy meeting, aiming to revive the group after SK Hynix, its main money maker, and the group’s electric vehicle battery arm suffered heavy losses. SK
Luxgen Motor Co (納智捷汽車), a subsidiary of Yulon Motor Co (裕隆汽車), yesterday said it is again offering a NT$100,000 discount for its entry-level n7 electric vehicle models. The n7’s price has gone down from NT$1.099 million to NT$999,000, Luxgen said, adding that there are 25,000 preorders for the model. MG Motor’s electric hatchback, the MG4, entered the market in the middle of last month, with a starting price of NT$990,000. China Motor Corp (中華汽車), which distributes MG vehicles in Taiwan, said it aims to sell 1,600 MG4s this year. MG, originally a British brand, was acquired by China’s SAIC Motor