Reps. Frank and Levin Release Letter to President Obama on Japan Currency
Rep. Barney Frank (D-MA), Chair of the House Financial Services Committee and Rep. Sander Levin (D-MI), Chair of the Trade Subcommittee of the House Ways and Means Committee, released the following letter sent to President Barack Obama requesting that he urge Prime Minister Taro Aso to resist recent calls to devalue the yen as a means to stimulate Japanese exports at the expense of the U.S. and other economies:
Dear Mr. President,
We understand that you will be meeting this week with Japanese Prime Minister Taro Aso to discuss the global economic crisis and other issues. We request that you urge the Prime Minister to resist recent calls to devalue the yen as a means to stimulate Japanese exports at the expense of the U.S. and other economies.
Earlier this month, a managing director of Japan’s largest business lobby, the Keidanren, said that Japanese companies are “crying out” for the government to artificially weaken the yen to stimulate auto and other exports. At the same time, several senior Japanese officials have stated that the Government of Japan may consider intervening to reduce the value of the yen. These statements are deeply disturbing, given the fragility of the global economy today and Japan’s recent history of massive currency market interventions.
In his Senate confirmation hearing, Treasury Secretary Geithner was asked about his views with respect to the possibility of Japan devaluing the yen. We were pleased that the Secretary made clear that “it is important for the United States and for the global economy that our major trading partners operate with a flexible exchange rate system in which market forces determine the value of exchange rates.” That message deserves to be repeated when you meet with the Prime Minister this week.
The United States and Japan have been, and continue to be, close friends and key allies. With the two largest economies in the world, our nations must work closely together to resolve the global economic crisis. We hope that your meeting with the Prime Minister will help to achieve that common objective.