Finance chiefs of Korea, U.S., Japan recognize concerns over slumping currencies

Finance

Published: 18 Apr. 2024, 09:14 Updated: 18 Apr. 2024, 18:34

Finance chiefs of Korea, U.S., Japan recognize concerns over slumping currencies

Korea's Finance Minister Choi Sang-mok, right, U.S. Treasury Secretary Janet Yellen, center, and Japan's Finance Minister Shunichi Suzuki pose for a photo prior to their first trilateral meeting in Washington on April 17, 2024. [YONHAP]

The financial chiefs of Korea, the United States and Japan acknowledged the concerns over the sharp depreciation of won and yen against the greenback during their first trilateral meeting in Washington on Wednesday.

Korea’s Finance Minister Choi Sang-mok and his U.S. and Japanese counterparts Janet Yellen and Shunichi Suzuki pledged to “consult closely on foreign exchange market developments in line with our existing G20 commitments, while acknowledging serious concerns of Japan and the Republic of Korea about the recent sharp depreciation of the Japanese yen and the Korean won,” they said in a coordinated message.

The won weakened sharply against the dollar following Iran’s attacks against Israel last Saturday, which came in response to a suspected Israeli strike on an Iranian embassy complex in Syria in early April.

The Korean currency broke the 1,400-won threshold on Tuesday for the first time since the 2022 post-pandemic monetary tightening. The threshold was previously reached during the 1997 Asian financial crisis and the 2008 global financial crisis.

In a statement, Seoul said that it will “vigilantly keep a close eye on the movement of the foreign exchange rate and currency supplies” as the won is roughly 7 percent weaker against the dollar this year compared to the yen, which is down around 9 percent.

The three also confirmed their commitment to coordinating sanctions against Russia and North Korea as well as overcoming issues in regards to supply chain vulnerabilities.

“Together, we affirm our commitment to utilize and coordinate our respective sanctions tools to impose costs on Russia for its war against Ukraine and target the Democratic People’s Republic of Korea’s [DPRK’s] weapons program,” they said in the statement.

“We emphasize the importance of collaboration to overcome supply chain vulnerabilities and the possible harm to our economies from non-market economic practices of other countries, including economic coercion and overcapacity in key sectors.”

They also vowed to work together to advance the multilateral development banks and strengthen other international financial institutions.

“Reaffirming the importance of Asean and Pacific Island countries, we will combine efforts to strengthen their macroeconomic and financial resilience as well as financial integrity. We welcome the progress in the trilateral collaboration among our development finance institutions.”

The trilateral gathering of financial chiefs follows the three-way summit in August between Korean President Yoon Suk Yeol, U.S. President Joe Biden and Japanese Prime Minister Fumio Kishida at the Camp David presidential retreat.

Launching the finance ministers’ meeting was part of a series of outcomes aimed at strengthening cooperation on multiple fronts, including defense, economic security and de-risking supply chains from exposure to China.

BY JIN MIN-JI [jin.minji@joongang.co.kr]