Japanese Finance Minister Taro Aso said on Saturday trade imbalances cannot be fixed through exchange-rate adjustments alone, pushing back against Washington’s calls to have more rigorous IMF scrutiny of currency moves.
Earlier, U. S. Treasury Secretary Steven Mnuchin called on the International Monetary Fund to enhance surveillance of its members’ exchange rates and external imbalances, as large trade imbalances would hamper “free and fair” trade.
But Aso told the IMF’s steering committee there were limits to using exchange-rate assessments to address current account imbalances for a country like Japan.
That is because the recent increases in Japan’s current account surplus are driven largely by rising dividend payments and repatriation of revenues from overseas investments, instead of any boost to exports from a weak yen.
“In cases where ‘excessive’ imbalances exist, they should be addressed by a package of macroeconomic and structural policy measures, ” Aso said in a speech to the International Monetary and Financial Committee.
