This week, the US Congress conducted a hearing on “Currency Manipulation And Its Effects On American Businesses And Workers,” for which it invited numerous experts to weigh in on undervalued currencies.  Among those who testified was General Motor’s Chief Economist, who discussed Japan’s purported policy of holding down the Yen, within the context of the auto industry.  He argued that by maintaining an already large and growing reserve of foreign exchange, by purchasing US assets through quasi-governmental institutions, and by threatening to intervene in forex markets if the Yen appreciated, Japan has successfully prevented the Yen from rising over the last few years, despite such a course being justified by economic fundamentals.

“Japan’s policies provided anywhere from a $2,000 to $14,000 cash windfall for each of the 2.2 million vehicles Japan’s automakers exported to the U.S. in 2006.”

Read More: GM chief economist testifies against alleged Japanese currency manipulation