China May Let Yuan Rise by June G-20 Meeting, Japan's Currency Chief Says
China may let its currency appreciate by the time of a Group of 20 meeting in late June, Japanese Vice Finance Minister Rintaro Tamaki said.
“Perhaps the Chinese will decide looking at that agenda,” Tamaki, Japan’s top currency official, said in an interview today in St. Gallen, Switzerland. “We do not put the foreign pressure on Chinese decision-making. This is an issue to be decided by Beijing.”
To bolster western exporters and curb their trade deficits, the U.S. and Europe have pressed China to let the yuan strengthen as the global economy recovers from the financial crisis. China has kept the currency at about 6.8 to the dollar since mid-2008, a policy that has also blunted the competitiveness of Asia’s export-dependent nations, whose currencies have appreciated this year.
Chinese policy makers have indicated they are waiting for clearer signs of a sustained global rebound before deciding to let the yuan gain. China, the world’s fastest-growing major economy, halted the currency’s 21 percent, three-year advance against the dollar in July 2008 to help exporters weather recessions in the U.S., Europe and Japan.
G-20 leaders plan to meet in Toronto on June 26-27. The members include the Group of Seven -- the U.S., the U.K., Japan, France, Germany, Canada and Italy -- plus such countries as China, Australia, Russia, India and Brazil.
“A flexible exchange rate in China is good to anyone, including China itself,” Tamaki said. He called the subject “very delicate.”
In St. Gallen for a conference, Tamaki deflected questions about Japan’s currency including the yen’s rate against the dollar.
“The yen exchange rate is not very predictable,” he said. “I should refrain myself from making any comments on the exchange-rate level.” Earlier today, Japanese Finance Minister Naoto Kan said in Tokyo that he expected the yen’s value against the dollar to fall.
Tamaki cited the spread of the Greek debt crisis to stress the importance of sound public finances in countries including Japan. A forthcoming Japanese “medium-term fiscal sustainability plan” is “essential” to “the taxpayers and to the markets,” he said.
Japanese Prime Minister Yukio Hatoyama’s administration plans to unveil a roadmap for achieving faster growth in June, the same month the government intends to issue a framework for restoring fiscal health. Higher growth would spur tax revenue and help to contain a debt burden that’s approaching twice the size of the economy.
Japan’s gross domestic product will grow 1.8 percent in the year ending next March, according to the median estimate of the country’s central bank board members. The economy will expand 2 percent next fiscal year, the board members predict.