Tensions growing between the US and Japan – Deutsche Bank

Research Team at Deutsche Bank, suggests that at the G7 finance leaders meeting this weekend much of the headlines are focused on what appears to be growing tension between the US and Japan concerning exchange rate policies.

Key Quotes

“Indeed Japan’s Finance Minister Taro Aso hinted at growing frustration in the Japan camp about the stronger Yen and the subsequent impact that this was having on exporters. This point was seemingly made to US Treasury Secretary Jack Lew with Aso saying to reporters that he had told Lew that ‘one-sided, abrupt, and speculative moves were seen in the FX market recently, and abrupt moves in the currency market are undesirable and the stability of currencies is important’.

According to Reuters Lew responded by saying that he did not consider recent moves in the Yen to be ‘disorderly’ and that ‘it’s important that the G7 has an agreement not only to refrain from competitive devaluations, but to communicate so that we don’t surprise each other’.”