A Chinese Foreign Ministry spokesman yesterday urged Tokyo to take a responsible stand in the devaluation of its currency.
"China hopes the Japanese Government will assume a responsible attitude and prevent the depreciation of currencies in the rest of Asia because of the devaluation of the Japanese yen," Sun Yuxi said when asked to comment on the recent sharp depreciation of the yen.
Japan is the world's second largest economy, after the United States, and the largest in Asia.
Continuous depreciation of the yen will have an adverse impact on Asia's economic development and financial stability, he said.
The yen/dollar rate stood at around 132 yesterday. It has slid about 16 per cent since September, dragging down almost all the currencies in East Asia.
Some Chinese and foreign economists claim that the Japanese Government has somehow encouraged the devaluation of its currency to benefit its own economy.
"Despite the official rhetoric that Japan does not want to artificially make the yen weaker, the reality is that Japan now acts as if it has a weak yen policy and has successfully made it weaker," said Stephen Jen, a London-based analyst with Morgan Stanley
The Japanese Government appears to be using a depreciating yen to expand exports and overcome chronic deflation with rising import prices, said Zhao Jinping, a senior fellow with the Development Research Center under the State Council.
The Japanese approach is to let the market determine whether the yen slides but then intervene if it strengthens, Zhao said.
Responding to the appreciation of the yen following the weakening of the US dollar caused by the September 11 terrorist attack, the Japanese Government entered the market seven times to sell yen and buy the US dollar, thus bringing the yen back to its sliding track.
Japan's economy minister, Heizo Takenaka, said there was no talk of propping up the sliding yen in his meetings with top US economic officials as the currency hit a three-year low against the dollar.
(China Daily January 13, 2002)
