The United States Treasury Department on Thursday (June 20) added Japan to its "monitoring list" of major trading partners whose currency practices "merit close attention".&nbsp;

A semi-annual report, it evaluates countries with substantial trade surpluses that actively engage in foreign exchange markets to gain trade advantages.&nbsp;

The latest report, as per AFP, stops short of labelling any nation a "currency manipulator".

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<h2>What is a currency "monitoring list"?</h2>

The United States "monitoring list" report evaluates countries with substantial trade surpluses that actively engage in foreign exchange markets to gain trade advantages.&nbsp;

According to the Treasury, Japan met two of the three criteria for "enhanced analysis." These included "having a material current account surplus and a significant bilateral trade surplus with the United States."

However, Japan did not meet the third criterion: being "engaged in persistent one-sided intervention in the foreign exchange market."

Alongside Japan, the monitoring list includes China, Taiwan, Malaysia, Singapore, Vietnam, and Germany. Previously, India was also a part of this list.

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In a statement, the Treasury Department clarified that none of these countries met all three criteria necessary for enhanced analysis.

"No major US trading partner manipulated the rate of exchange between its currency and the US dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade during the four quarters through December 2023," the Treasury statement read.

<h2>Why was Japan added to the list?</h2>

Japan's recent inclusion in the list follows its intervention in the currency markets beginning in April. This intervention sought to support the yen, which had plummeted in value — from around 115 per dollar before Russia's invasion of Ukraine in February 2022 to nearly 160.&nbsp;

The sharp decline in the yen's value was in part attributed to the Central Bank of Japan's decision to maintain ultra-low interest rates even as central banks increased theirs.

Since initiating these measures, Japanese authorities have spent approximately $62 billion to bolster their currency, according to government data released late last month.

(With inputs from agencies)

The United States Treasury Department on Thursday (June 20) added Japan to its "monitoring list" of major trading partners whose currency practices "merit close attention".

The United States Treasury Department on Thursday (June 20) added Japan to its "monitoring list" of major trading partners whose currency practices "merit close attention". A semi-annual report, it evaluates countries with substantial trade surpluses that actively engage in foreign exchange markets to gain trade advantages. The latest report, as per AFP, stops short of labelling any nation a "currency manipulator". Also read | TikTok fights back: ByteDance appeals against potential ban in US, calls it 'unconstitutional' What is a currency "monitoring list"? The United States "monitoring list" report evaluates countries with substantial trade surpluses that actively engage in foreign exchange markets to gain trade advantages. According to the Treasury, Japan met two of the three criteria for "enhanced analysis." These included "having a material current account surplus and a significant bilateral trade surplus with the United States." However, Japan did not meet the third criterion: being "engaged in persistent one-sided intervention in the foreign exchange market." Alongside Japan, the monitoring list includes China, Taiwan, Malaysia, Singapore, Vietnam, and Germany. Previously, India was also a part of this list. Also read | IDF handed over legal powers in West Bank to pro-settler civil servants: Report In a statement, the Treasury Department clarified that none of these countries met all three criteria necessary for enhanced analysis. "No major US trading partner manipulated the rate of exchange between its currency and the US dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade during the four quarters through December 2023," the Treasury statement read. Why was Japan added to the list? Japan's recent inclusion in the list follows its intervention in the currency markets beginning in April. This intervention sought to support the yen, which had plummeted in value — from around 115 per dollar before Russia's invasion of Ukraine in February 2022 to nearly 160. The sharp decline in the yen's value was in part attributed to the Central Bank of Japan's decision to maintain ultra-low interest rates even as central banks increased theirs. Since initiating these measures, Japanese authorities have spent approximately $62 billion to bolster their currency, according to government data released late last month. (With inputs from agencies)

US adds Japan to currency 'monitoring list'; stops short of labelling it 'currency manipulator'

Brazil's antitrust watchdog will fine Citibank, Societe Generale for exchange rate manipulation. Citibank has committed to pay $13.78 million and Societe will pay $1.07 million in fines.

Brazil's antitrust watchdog fines Citibank, Societe Generale

The United States on Monday formally accused <a href="https://www.wionews.com/world/trump-defends-stance-on-china-trade-after-new-tariffs-says-things-are-going-well-240486">China of manipulating </a>its currency, marking the second major escalation in the two countries' spiralling trade war in just 24 hours.

Washington's sudden move came the day China allowed the yuan to fall below 7 to the dollar for the first time in about a decade -&nbsp;provoking US President Donald Trump's ire and <a href="https://www.wionews.com/south-asia/pakistan-looses-3-key-positions-in-world-trade-organisation-240613">sending global equities</a> markets diving into the red.

Wall Street on Monday posted its worst one-day losses of 2019 as hope of any near-term resolution to the year-long trade war between the world's top two economies appeared to slide out of view.

In a Twitter outburst earlier in the day, Trump had angrily accused Beijing of weakening the yuan "to steal our businesses and factories."

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China is intent on continuing to receive the hundreds of Billions of Dollars they have been taking from the U.S. with unfair trade practices and currency manipulation. So one-sided, it should have been stopped many years ago!
— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1158407373666566145?ref_src=twsrc%5Etfw">August 5, 2019</a></blockquote>
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US Treasury Secretary Steven Mnuchin, "under the auspices of President Trump, has today determined that China is a<a href="https://www.wionews.com/business-economy/chinese-yuan-falls-to-weakest-level-against-the-dollar-since-2010-240743"> currency manipulator</a>," the Treasury Department said in a statement late Monday.

As a result, Mnuchin will engage the International Monetary Fund "to eliminate the unfair competitive advantage created by China's latest actions," the statement said.

The new designation is largely symbolic, since it calls for consultations with countries found to be manipulating their currencies.

But it could gain teeth if the Commerce Department begins imposing tariffs on countries found to be undervaluing their currencies, as that department said earlier this year it plans to do.

The volley lobbed across the Pacific on Monday was sure to shake the global economy even further, with markets doubtful that either side is willing or able to prevent hostilities from spinning out of control.

Chinese state media also announced Monday that Beijing had suspended purchases of American farm exports, piling pain on US agricultural states already battered by Beijing's retaliation in the trade war.

The yuan's weakening came just days after Trump announced plans to raise tariffs on another $300 billion in Chinese imports starting September 1, accusing Beijing of failing to live up to commitments in trade negotiations.

That would mean virtually all of the roughly $660 billion in goods exchanged annually between China and the United States are subject to trade barriers.

The battle has sapped business confidence and undermined both countries' manufacturing sectors just as the world economy's slowdown worsens.

Activity in the US service sector hit a three-year low last month, survey data showed Monday, confirming a step-down in US economic growth.

Trump's move was also sudden: On the campaign trail, he had loudly pledged to designate China a currency manipulator but his administration had until Monday refrained from doing so.

The Treasury Department had instead kept China on a "monitoring list" of countries subject to close scrutiny due to their currency practices, including in its most recent report released in May.&nbsp;

The yuan is not freely convertible and the government limits its movement against the US dollar to a two per cent range on either side of a central parity rate which the People's Bank of China (PBOC) sets each day to reflect market trends and control volatility.

"It appears that the tariffs hike suggests the return of tit-for-tat moves and a suspension of trade talks, and the PBOC sees no need to keep the yuan stable in the near term," Ken Cheung, a senior currency strategist at Mizuho Bank, told Bloomberg News.

In a statement on Monday morning, the PBOC said the exchange rate against the US dollar had been "affected by unilateralism and trade protectionism measures and the imposition of tariff increases on China."

The central bank said the yuan remained "stable and strong against the basket of currencies" and said it would "resolutely crack down on short-term speculation and maintain stable operation of the foreign exchange market and stabilize market expectations."

It went on to say that it had the "experience, confidence and ability to keep the RMB exchange rate basically stable at a reasonable and balanced level."

Julian Evans-Pritchard, senior China economist with Capital Economics, said the PBOC has "effectively weaponized the exchange rate" by linking the currency with the US trade war.

"Given that their goal is presumably to offset some of the impact from additional US tariffs, they are likely to allow the currency to weaken further, probably by 5-10 per cent over the coming quarters," said Evans-Pritchard.

The United States on Monday formally accused China of manipulating its currency, marking the second major escalation in the two countries' spiralling trade war in just 24 hours.

The United States on Monday formally accused China of manipulating its currency, marking the second major escalation in the two countries' spiralling trade war in just 24 hours. Washington's sudden move came the day China allowed the yuan to fall below 7 to the dollar for the first time in about a decade - provoking US President Donald Trump's ire and sending global equities markets diving into the red. Wall Street on Monday posted its worst one-day losses of 2019 as hope of any near-term resolution to the year-long trade war between the world's top two economies appeared to slide out of view. In a Twitter outburst earlier in the day, Trump had angrily accused Beijing of weakening the yuan "to steal our businesses and factories." China is intent on continuing to receive the hundreds of Billions of Dollars they have been taking from the U.S. with unfair trade practices and currency manipulation. So one-sided, it should have been stopped many years ago! — Donald J. Trump (@realDonaldTrump) August 5, 2019 × US Treasury Secretary Steven Mnuchin, "under the auspices of President Trump, has today determined that China is a currency manipulator," the Treasury Department said in a statement late Monday. As a result, Mnuchin will engage the International Monetary Fund "to eliminate the unfair competitive advantage created by China's latest actions," the statement said. The new designation is largely symbolic, since it calls for consultations with countries found to be manipulating their currencies. But it could gain teeth if the Commerce Department begins imposing tariffs on countries found to be undervaluing their currencies, as that department said earlier this year it plans to do. The volley lobbed across the Pacific on Monday was sure to shake the global economy even further, with markets doubtful that either side is willing or able to prevent hostilities from spinning out of control. Chinese state media also announced Monday that Beijing had suspended purchases of American farm exports, piling pain on US agricultural states already battered by Beijing's retaliation in the trade war. The yuan's weakening came just days after Trump announced plans to raise tariffs on another $300 billion in Chinese imports starting September 1, accusing Beijing of failing to live up to commitments in trade negotiations. That would mean virtually all of the roughly $660 billion in goods exchanged annually between China and the United States are subject to trade barriers. The battle has sapped business confidence and undermined both countries' manufacturing sectors just as the world economy's slowdown worsens. Activity in the US service sector hit a three-year low last month, survey data showed Monday, confirming a step-down in US economic growth. Trump's move was also sudden: On the campaign trail, he had loudly pledged to designate China a currency manipulator but his administration had until Monday refrained from doing so. The Treasury Department had instead kept China on a "monitoring list" of countries subject to close scrutiny due to their currency practices, including in its most recent report released in May. The yuan is not freely convertible and the government limits its movement against the US dollar to a two per cent range on either side of a central parity rate which the People's Bank of China (PBOC) sets each day to reflect market trends and control volatility. "It appears that the tariffs hike suggests the return of tit-for-tat moves and a suspension of trade talks, and the PBOC sees no need to keep the yuan stable in the near term," Ken Cheung, a senior currency strategist at Mizuho Bank, told Bloomberg News. In a statement on Monday morning, the PBOC said the exchange rate against the US dollar had been "affected by unilateralism and trade protectionism measures and the imposition of tariff increases on China." The central bank said the yuan remained "stable and strong against the basket of currencies" and said it would "resolutely crack down on short-term speculation and maintain stable operation of the foreign exchange market and stabilize market expectations." It went on to say that it had the "experience, confidence and ability to keep the RMB exchange rate basically stable at a reasonable and balanced level." Julian Evans-Pritchard, senior China economist with Capital Economics, said the PBOC has "effectively weaponized the exchange rate" by linking the currency with the US trade war. "Given that their goal is presumably to offset some of the impact from additional US tariffs, they are likely to allow the currency to weaken further, probably by 5-10 per cent over the coming quarters," said Evans-Pritchard.

US designates China a currency manipulator as yuan hits record low

China's decision to lower the value of renminbi has angered the United States which has accused Beijing of manipulating its currency. Washington's sudden move came the day China allowed the yuan to fall below 7 to the dollar for the first time in about a decade - provoking US President Donald Trump's ire and sending global equities markets diving into the red.

So what exactly is currency manipulation? To put it simply, a country indulges in currency manipulation when it artificially lowers the value of its own currency. In turn, it lowers the cost of its exports to gain a competitive advantage.

The move will help maintain the attractiveness of Chinese goods, and keep its exports at a favourable prices.

The US called it an unfair practice; in fact Washington has threatened to impose more tariffs on Chinese goods from September 1. But Beijing said it lowered the value of its currency to balance out the adverse impact of high US tariffs on Chinese exports.

On the positive side, currency devaluation strengthens the sales and revenue of domestic industry. But on the negative side, due to high import cost, people may choose not to buy imported goods, which could lead to inflation or sometimes monopoly in the local market.

An immediate impact of currency devaluation by China could be felt by Indian exporters. If Chinese exports become more attractive, it will make it that much more difficult for Indian exports.

The Indian rupee is already trading higher, at 70.80 per dollar.

Some Asian countries could follow suit by lowering their own currencies which would potentially affect the global supply chain.

The second major battle between the US and China - amid the trade war - has sapped business confidence and undermined both countries' manufacturing sectors just as the world economy's slowdown worsens.

Activity in the US service sector hit a three-year low last month, survey data showed Monday, confirming a step-down in US economic growth.

China's decision to lower the value of renminbi has angered the United States which has accused Beijing of manipulating its currency. Washington's sudden move came the day China allowed the yuan to fall below 7 to the dollar for the first time in about a decade - provoking US President Donald Trump's ire and sending global equities markets diving into the red.

China's decision to lower the value of renminbi has angered the United States which has accused Beijing of manipulating its currency. Washington's sudden move came the day China allowed the yuan to fall below 7 to the dollar for the first time in about a decade - provoking US President Donald Trump's ire and sending global equities markets diving into the red. So what exactly is currency manipulation? To put it simply, a country indulges in currency manipulation when it artificially lowers the value of its own currency. In turn, it lowers the cost of its exports to gain a competitive advantage. The move will help maintain the attractiveness of Chinese goods, and keep its exports at a favourable prices. The US called it an unfair practice; in fact Washington has threatened to impose more tariffs on Chinese goods from September 1. But Beijing said it lowered the value of its currency to balance out the adverse impact of high US tariffs on Chinese exports. On the positive side, currency devaluation strengthens the sales and revenue of domestic industry. But on the negative side, due to high import cost, people may choose not to buy imported goods, which could lead to inflation or sometimes monopoly in the local market. An immediate impact of currency devaluation by China could be felt by Indian exporters. If Chinese exports become more attractive, it will make it that much more difficult for Indian exports. The Indian rupee is already trading higher, at 70.80 per dollar. Some Asian countries could follow suit by lowering their own currencies which would potentially affect the global supply chain. The second major battle between the US and China - amid the trade war - has sapped business confidence and undermined both countries' manufacturing sectors just as the world economy's slowdown worsens. Activity in the US service sector hit a three-year low last month, survey data showed Monday, confirming a step-down in US economic growth.

Explained: What is currency manipulation and how China's move can impact India

US President Donald Trump on Wednesday accused China and Europe of deliberately weakening their currencies and stimulating their economies to gain competitive advantages over the United States.

"China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA," he said on Twitter.

Trump also implied that the Federal Reserve should likewise ease monetary policy, something he has called for in the past.

"We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games -- as they have for many years!" the president said.&nbsp;

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China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA. We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games - as they have for many years!
— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1146423819906748416?ref_src=twsrc%5Etfw">July 3, 2019</a></blockquote>
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&nbsp;

US President Donald Trump on Wednesday accused China and Europe of deliberately weakening their currencies and stimulating their economies to gain competitive advantages over the United States.

US President Donald Trump on Wednesday accused China and Europe of deliberately weakening their currencies and stimulating their economies to gain competitive advantages over the United States. "China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA," he said on Twitter. Trump also implied that the Federal Reserve should likewise ease monetary policy, something he has called for in the past. "We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games -- as they have for many years!" the president said. China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA. We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games - as they have for many years! — Donald J. Trump (@realDonaldTrump) July 3, 2019 ×

Trump accuses China, Europe of currency manipulation, stimulus

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