US President Donald Trump has told the leaders of Japan and China that they cannot continue to reduce the value of their currencies, as doing so would be unfair to the US. The remarks added to market jitters, with the yen rising nearly 2% on Tuesday after Trump’s comments.
Trump said that imposing tariffs is a simple solution to the problem, rather than repeatedly complaining about Japan and China weakening their currencies. However, Tokyo denies directly targeting the yen, while Beijing has taken steps to stabilize its currency, the yuan.
The Bank of Japan (BOJ) may be pressured to raise interest rates faster due to Trump’s comments, which some analysts see as a positive sign for further rate hikes. The BOJ is already eyeing interest rate increases after inflation exceeded 2% for nearly three years.
China has focused on stabilizing its currency in recent weeks, while Japan has maintained its stance on currency policy. The US and its allies have urged G7 and G20 members to reaffirm their commitment to avoiding excessive volatility in the currency market.
The comments from Trump come as the US continues to escalate global trade tensions with Mexico and Canada, while also imposing new tariffs on Chinese goods.
Source: https://www.reuters.com/markets/currencies/trump-says-japan-china-cannot-keep-reducing-value-their-currencies-2025-03-03