China Flags Risks of Weakening Yen

China said a falling yen may cause Asian neighbors to weaken their currencies and intensify trade disputes, reiterating concerns as the Bank of Japan prepares to increase stimulus under new Governor Haruhiko Kuroda.

“A weakening yen may cause a beggar-thy-neighbor effect,” as economies compete in electronics, automobiles and industrial products, China’s foreign-exchange regulator said today in its annual report on international payments. “If other Asian economies follow Japan’s suit, trade disputes and policy competition may intensify to hinder regional cooperation and economic integration.”