US keeps Japan and 6 other economies on currency watch list

The Treasury building is seen in Washington, May 4, 2021. (AP Photo/Patrick Semansky, File)

WASHINGTON (Kyodo) — The U.S. Treasury Department on Thursday kept Japan and six other economies on a watch list for potentially unfair monetary practices and called on Tokyo to ensure any necessary market interventions are well-coordinated.

Referring to Japan’s intervention to buy yen and sell dollars in September in a semi-annual report to Congress, the department said interventions should be reserved “only in very exceptional circumstances with appropriate prior consultation.”

The department did not criticize the intervention, which temporarily lowered the value of the U.S. dollar against the yen, and said, “Japan is transparent on foreign exchange transactions, regularly publishing its foreign exchange interventions every month”.

Besides Japan, the other economies kept on the list were China, Germany, Malaysia, Singapore, South Korea and Taiwan. India and Vietnam were on the list in the previous report published in June, but this time removed.

The report criticized China for its lack of transparency regarding its currency market interventions and exchange rate mechanisms.

“Treasury will continue to closely monitor China’s use of exchange rate management, capital flows and regulatory measures and their potential impact on the exchange rate,” the report said.

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