Japan and USA rift over yen devaluation
A soaring yen is currently pushing Tokyo and Washington into another standoff regarding exchange rates, driving anti-trade fervor in America and generating broader troubles in rather a vulnerable global economy.
Japanese companies concerned with dropping exports and lower revenues are applying pressure on policy makers to devalue the Japanese yen. As for the USA, in this country companies and unions are afraid that devaluation will generate job losses as well as factory closures.
American economists as well as officials don’t want a scheduled yen intervention as they suggest it could spark a chain reaction of currency depreciations all over the world, including China. This week Jacob Lew, Treasury Secretary is going to meet his counterparts from Japan as well as other G7 countries in Sendai.
The rift appears to be an evident sign of broader weakness in the world economy. Most political leaders are struggling to boost their national economies, dependent on low interest rates, while more and more backlashes over trade arose.