TOKYO (AP) — Japanese officials rejected the assertion by President Donald Trump that Tokyo is using its monetary policies to weaken the yen against the U.S. dollar to gain a trade advantage.
Government spokesman Yoshihide Suga said Wednesday that Trump's comments, made in a meeting with executives of pharmaceutical companies, "completely misses the mark."
"Our monetary easing policy is intended to stabilize prices, not to weaken the yen against the U.S. dollar," Suga said.
Prime Minister Shinzo Abe is due to meet with Trump in Washington on Feb. 10. Suga told reporters Japan plans to explain its stance on the issue.
During the meeting with pharmaceutical industry leaders, Trump complained about drug makers shifting production overseas and said his trade policies would end unfair "global freeloading," according to a transcript of the meeting.
He blamed regulations and devaluation by other countries.
"Every other country lives on devaluation," he said. "You look at what China's doing, you look at what Japan has done over the years. ... They play the money market, they play the devaluation market and we sit there like a bunch of dummies."
After Trump's comments, the dollar weakened sharply against the yen. But by midday Wednesday in Asia, it was at 113.00 yen, slightly above its previous close of 112.94 yen.
The yen's value fell steadily after the Bank of Japan implemented massive monetary easing four years ago, hoping to spur inflation and stimulate economic activity. By injecting massive amounts of cash into the economy, the central bank caused the yen's value to fall from about 80 yen to the dollar to a low of about 125 yen to the dollar in mid-2015.
Recently, the dollar has gained against other currencies, partly because the Federal Reserve is gradually raising interest rates and partly because investors are betting on bigger returns from investments under Trump's administration. The dollar was trading near 100 yen in August but now stands at about 113 yen.
A senior Finance Ministry official in charge of currency diplomacy likewise denied Japan was deliberately striving to devalue the yen.
"Foreign exchange rates are led by the markets. We are not manipulating them," the Kyodo News Service quoted Masatsugu Asakawa, vice finance minister for international affairs, as saying.
"I don't quite understand what (Trump) actually meant," Asakawa said. He said Japan has not intervened in currency markets for a long time.
China's financial markets and government offices are closed this week for lunar new year holidays. Although the U.S. has long accused Beijing of seeking to boost exports by devaluing the yuan, Chinese regulators recently have been striving to prevent the currency from weakening too quickly.