Asian economies escape 'manipulator' tag, but expect more pressure on trade
BEIJING (Reuters) - Asian countries escaped the currency manipulator label in the latest U.S. Treasury report, but remain wary of possible trade friction as President Donald Trump maintains his administration will seek to address trade imbalances.
Trump has said some U.S. trading partners, particularly China, manipulated their currency, but has since backed off that claim and acknowledged that China had not weakened the yuan to make its exports cheaper.
China, Japan, South Korea and Taiwan remained on a list for special monitoring of currency practices, China by virtue of a massive trade surplus with the United States.
"Fixing trade imbalances will be an issue for the U.S. in its dialogues with China and Japan, while the manipulator threat has been put on the backburner," a Japanese government official told Reuters.
The semi-annual U.S. Treasury currency report released on Friday did not name any major trading partner as a currency manipulator, although it seemed to leave open the option for action in the future.
Trump has softened his rhetoric against China's trade practices as Beijing has intervened in foreign exchange markets to prop up the value of its yuan, and as he looks to China for help dealing with rising tension on the Korean peninsula.
"I think the United States decided to forego (labeling China a currency manipulator) this time because it wants China's cooperation on North Korea," said Takeshi Minami, chief economist at Norinchukin Research Institute in Tokyo.
"Depending on how the North Korean situation develops, we don't know what will happen in half a year (when the next currency report is due to be published)."