This year the yen has depreciated 13% against the dollar, which reflects an initiative by the Shinzo Abe administration to aggressively buy bonds. Basically the US fears that with further devaluating measures, Japan will become too competitive, and go against previous agreements settled upon at G7 and G20.
Here is one example where the "unholy trinity" (IMF, World Bank, WTO) are flexing their muscles. Japan will continue to face pressures to "play fair" or else. While each of these entities are set up slightly differently, they basically put the power in the big players hands i.e the United States. While countries like Japan and Korea are relatively new to "rich club" of countries, it will be interesting to see how they react to submitting to the "rich clubs" authority.
China for now has dodged any accusations of this nature due to an appreciation of the yuan and a decrease in their surplus of exports.
If you think this is bad, you should see how the "unholy trinity" cripples developing nations with a plethora of neo-liberal regulations attached to loans. This essentially forces them to open their economies to free trade so that rich countries can exploit them (among many other things).
http://www.marketwatch.com/story/us-again-says-china-not-a-currency-manipulator-2013-04-12?link=MW_story_popular
1 comment:
I totally agree with you. What else can Japan do after years of deflation economy? This is their last resort and what they are pursuing is inevitable? While it may hurt some countries in the short term, long term can bring more benefit in trade relations and how technology in Japan can help the world evolve. I believe Japan is actually going on the right track.
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