The Japanese Prime Minister, Shinzo Abe has refuted suggestions that his government is deliberately manipulating the yen, which has fallen by 15 per cent against the US dollar since Trump’s election in November.
Abe and his officials said Japan was fully committed to its obligations as a member of the G7 and G20 not to manipulate its currency.
“We entrust monetary policy to the Bank of Japan to meet the two per cent inflation target as appropriate,” Abe told lawmakers in Japan’s parliament today.
Returning to a theme of his election campaign, Trump told a group of pharmaceutical executives on Tuesday: “You look at what China’s doing, you look at what Japan has done over the years. They play the money market, they play the devaluation market and we sit there like a bunch of dummies”.
Speaking at a Japanese parliamentary budget committee earlier on Wednesday, Abe said he would be looking to create employment in the US, cooperate on Trump’s infrastructure plans and help to boost productivity in the States. Japanese automotive companies account for 1.5m direct and indirect jobs in the States, Abe said.
Abe and Trump will be meeting in Washington on 10th February, where the two leaders are expected to discuss an economic programme devised by Japanese officials.
Japan’s Mainichi newspaper has reported that the package will include proposals for Japanese investment in shale gas and high-speed rail projects in Texas and California. The document has been drafted as the “"U.S.-Japan Growth and Employment Initiative", according to Reuters.
Japan intervened to weaken the yen in the early 2000s and during the financial crisis.
In addition to allegations of currency manipulation, Trump has also expressed concerns that the US is getting an "unfair" deal from Japanese car makers.
The world’s second largest car maker, Toyota, became the subject of Donald Trump’s Twitter feed when he wrongly accused the firm of planning to build new Corolla models destined for the US market at a plant in Mexico.
“Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax”, Trump posted in January.
Trump's statement wiped $1.2bn off Toyota’s share price within five minutes.
The car maker responded by saying that the US received $2 in every $3 the company spent in North American factories over the last two decades.
“With more than $21.9bn direct investment in the US, 10 manufacturing facilities, 1,500 dealerships and 136,000 employees, Toyota looks forward to collaborating with the Trump administration to serve in the best interests of consumers and the automotive industry,” Toyota said.