Beijing - Chinese commerce minister Chen Deming expressed concern Friday about loose central bank policies pushing down the value of major currencies, as the Japanese yen extended its recent falls.
Chen told reporters he was “very concerned” this year with “the competitive depreciation of currencies in the world and the negative impact on the global economy led by the excess issuance of money”.
He said that declines in the value of the yen, the US dollar and the euro would have a big impact on developing countries, including China.
Chen added that monetary easing policies by central banks in the United States, Japan and the European Union to stimulate their economies “should not spread out to affect other countries”.
While his criticism was not focused solely on Japan, it followed steep falls in the yen in recent months since Prime Minister Shinzo Abe took power backing a policy of aggressive monetary easing to boost the economy.
Easing tends to weigh on currencies, and the yen hit a three-and-a-half-year low against the dollar in Asia Friday, with the greenback fetching 95.42 yen in Tokyo afternoon trade.
But the aggressive policy pursued by Abe has led to accusations that the government is seeking to manipulate the yen to help its exporters, whose products are more competitive overseas when the yen is weaker.
The falling value of the yen could further strain trade ties between Beijing and Tokyo, which have already been damaged by a row over East China Sea islands, controlled by Japan but claimed by China.
Critics in emerging nations have also argued that easing measures, especially in the US, have driven down the value of the dollar and sparked huge “hot money” capital flows, raising the risk of overheating and driving up national currencies.
Chen also emphasised that finance ministers and central bank governors from the Group of 20 major advanced and developing economies had recently promised not to weaken their currencies to gain competitive advantage.
At a meeting in Moscow in February, the G-20 officials said in a statement they “will refrain from competitive devaluation” and “will not target our exchange rates for competitive purposes”.
His comments came after Fed chairman Ben Bernanke said late last month that the central bank's $85 billion a month bond-purchase programme aimed at holding down long-term interest rates and encouraging investment - known as quantitative easing - was still merited. - Sapa-AFP