Carmakers in the United States have urged the Obama administration to stifle Japanese efforts to resuscitate their economy by weakening their currency to boost exports. The carmakers claim that the practice would hurt the US jobs market. Matt Blunt, president of the American Automotive Policy Council, told Reuters in an interview that Japan was engaging in "currency manipulation," which makes it harder to create jobs in the US.
He noted that the Japanese yen has moved 13 percentage points in a short period of time, which is more than the profit margin on many small cars. Blunt told Reuters that although the “product” could be made in other places, it is the carmakers’ desire to create it in the US and export it around the world.
The American Automotive Policy Council represents the Detroit Three carmakers -- General Motors Co., Ford Motor Co. and Fiat-controlled Chrysler Group. In a statement, Blunt said that they are urging the Obama Administration to make it clear to Japan that its currency policies are unacceptable and “will be met by reciprocal measures." Japan is currently suffering its fourth recession since 2000, while its export-dependent economy is hurting from a strong yen.
Newly named Japanese Prime Minister Shinzo Abe has grumbled about the yen’s current value, placing more pressure on the Bank of Japan to further ease monetary policy by increasing its annual inflation target to 2 percent. The yen weakened against the dollar Thursday as investors bet that the Bank of Japan will further ease its monetary policies.