"CEAC Commentary" introduces news analyses andopinions in Japan on topics related to regional
cooperation and integration in East Asia, but they do
not represent the views of CEAC as an institution.

August 22, 2013

China's and South Korea's Criticism against
Japan's Monetary Policy Wide of the Mark
By SUZUKI Keisuke
China and South Korea are waging a negative campaign against Japan's
monetary policy to the western media claiming that Japan is intentionally letting theyen fall in value on foreign exchange markets. Fairly high-ranking government officials
including South Korea's financial minister are repeatedly making utterly groundlesscriticism based on mistaken ideas and misinterpretation of facts. Today's Chinese andSouth Korean governments are taking such Hitlerite approach that if you tell a lie big
enough and keep repeating it, people will eventually come to believe it. It is an approach
which manipulates the fact, employed solely for the sake of their own national interestsand is therefore lacking decency. We must be wary of it.
In making judgments about diplomacy or politics, we should refrain fromemotionally or sentimentally expressing outrage and I personally would not approve ofsuch demeanor. However, given that the current criticism against Japan's policy isentirely slanderous accusation, I find it necessary to offer rebuttals to it and therefore
take up my pen here. Firstly, as the case now stands, yen is not at all “weakening”. Inview of the market environment, current move is no more than a process of correction of
the quite exceeding yen appreciation as a consequence of speculative trades months ago.
According to the long-term trend of the past, it is obvious that there is no claiming that
yen has yet returned to a reasonable level.
Secondly, while it is true that expectations and conducts of market players
have shifted due to the change in Japan's monetary policy and this consequently
affected the foreign exchange market, this should be regarded as a regular free market
behavior in response to the change in Japan's monetary policy as a part of its domestic
economic policy and the accusation of talking down the yen is a significant factual error.
Needless to say, market players are free to conduct in Japan and otheradvanced countries. If a government must constrain its policy lest there be any
influence on the market at large, factoring into calculation conducts of market players,the initial premise of the market economy would be turned on its head. Countries
anywhere would be deprived of the ability to expeditiously implement not only
monetary policies but policies of any kind. It is a most strange argument ever.
It has been a commonly recognized prohibited means in the international
community, subject to world-wide criticism, to manipulate the trend of money flow viadirect intervention in the market as do China and South Korea. In fact, why could
Chinese yuan and Korean Won remain abnormally low against US dollars incomparison to Japanese yen? It is obvious that there was no little influence of directintervention in the foreign exchange market by the governments.
The criticism of China and South Korea, who have been taking such prohibited
measures, against the free conduct of market players as a consequence of the change inJapan's monetary policy out of their national ego, must be quite wide of the mark andirresponsible and baseless agitation and slanderous accusation. Should the current
Japan's monetary policy be subject to criticism, any monetary easing implemented by
the central banks should also be criticized. This is a sheer nonsense. In the future, it isquite likely that China and South Korea will persistently wage slanderous campaign allover the world and I am really afraid of the situation that other countries will come tobelieve their lies. Bearing these points in mind, Japanese government is expected toexpress duly the truth externally.
(This is an English translation of the article written by Mr. SUZUKI Keisuke, Memberof the House of Representatives, which originally appeared on the e-forum“Hyakka-Somei” of CEAC on July 19, 2013.)