The United States’ second biggest carmaker says that Japan is a currency manipulator as the yen continues to fall against every major currency since November of last year. Ford’s Chief Executive Officer Alan Mulally said that this is giving their local exporters “an unfair advantage” while also undermining US car markers’ profits.
The yen has fallen 17 percent versus the US dollar and as a result, the value of overseas sales from various Japanese exporters like Toyota and Sony has risen. Last month’s exports from Japan was at its highest since 2010 and the Topix, Japan’s benchmark stock index climbed to its highest in five years. It is not just US carmakers that are concerned with the falling yen. Bank of Korea governor Kim Choong-soo said that all Asian countries should “defend themselves” against Japan’s reflation campaign, dubbed Abenomics, which will produce negative side effects on their own markets. One sign that the weak yen has affected the auto industry is that Nissan recently cut prices on seven models, pushing its US sales to a 25% surge last May. Mulally says that the currency manipulation should bring back the US market to “the place where the currencies are set by the markets and the free trade agreements really are free trade agreements.”
Observers say that Mulally is one of the biggest critics of the yen’s performance in the international market and has led US carmakers in hiring lobbyists to oppose Japan’s entry into the Trans-Pacific Partnership, a regional free-trade agreement. He has also continually expressed his concerns that Japan is “the most closed market in the world” when it comes to US carmakers, with Japanese carmakers accounting for 90% of sales in their home market. Democratic lawmakers, led by Congressman Sander Levin of Michigan sent a letter to President Barack Obama last March, saying that letting Japan into the TPP negotiations would further hurt the imbalance in the auto market.
[ via South China Morning Post ]