Korea and China voice concerns about the yen

Korea and China have expressed concerns that Japanese government’s financial policies are intended to further weaken the yen, Japanese media reported on Wednesday.

Japan’s Jiji Press said Korean and Chinese government officials made the comments about the so-called Abenomics of Japanese Prime Minister Shinzo Abe at a World Trade Organization meeting in Geneva to review Japan’s trade policies and practices.

It said Japanese government officials responded that Tokyo’s “monetary easing is meant to pull the nation’s economy out of prolonged deflation and yen’s exchange rate is determined by market.”

Sources told the Jiji that Japanese authorities received about 700 questions from 30 countries regarding Japan’s trade policies for the review ahead of the meeting.

It also said the United States, Australia and New Zealand have expressed hope that Japan will participate in the Trans-Pacific Strategic Economic Partnership.

In regard to Japan’s weakening yen, Korea’s President-elect Park Geun-hye has said her government would intervene in foreign exchange markets to help Korean businesses.

“The government will take pre-emptive and effective measures in response to changes in the foreign exchange market in a bid to prevent losses to local businesses,” Park said in a meeting with Han Duck-soo, chairman of the Korea International Trade Association (KITA), on Wednesday. “I recognize that stabilization in the foreign exchange market is a very important matter.”

It was the first time the president-elect mentioned foreign exchange rates since the transition team for the next government was launched.

Japan’s Kyodo News, which reported Park’s remarks, said there is mounting concern in Korea that exporters might not be competitive in global markets against Japanese rivals.

By Kim Mi-ju [mijukim@joongang.co.kr ]