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February 21st 2006

US auto makers continue to point fingers

A few weeks ago, the Bank of Japan released official data that indicated it had not intervened in forex markets in over 18 months. It was expected that this data would exonerate Japan from the accusations of American auto makers, who insisted Japan was artificially holding down the value of the Yen. Sure enough, representatives from these auto makers have backed away from their claims of forex intervention, arguing instead that the bank’s threat of intervention is tantamount to actual intervention. It has also begun to shift some of its attention to Korea, where the Central Bank routinely intervenes to hold down the value of the Won. United Press International reports:

Despite strong economic growth, over the past five years Japan’s currency has been undervalued by as much as 36 percent against the dollar. This means a car imported from Japan has had an unfair subsidized cost advantage over U.S. cars.

Read More: Outside View: U.S. cars need Bush’s help

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Posted by Adam Kritzer | in Japanese Yen, Politics & Policy | No Comments »

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