Automakers urge U.S. fight Japan's actions to weaken yen
WASHINGTON (Reuters) - U.S. auto manufacturers on Thursday urged the Obama administration to fight Japanese efforts to revive their economy by weakening the yen to boost exports, saying the practice would hurt the U.S. jobs market.
Matt Blunt, president of the American Automotive Policy Council, put Japan's actions in a harsh light in an interview with Reuters. He said Japan was engaging in "currency manipulation," which he said "makes it more difficult to create jobs in the United States."
"The Japanese yen has moved 13 percentage points in a very quick period of time," more than the profit margin on many small cars, he said.
"Certainly the product can be made in other places. But obviously our desire is to create that product in the United States and export it around the world," Blunt said.
His group represents the Detroit Three U.S. automakers, General Motors (GM.N), Ford (F.N) and Chrysler, which is controlled by Italian automaker Fiat (FIA.MI).
"We urge the Obama Administration to make it clear to Japan that such policies are unacceptable and will be met by reciprocal measures," Blunt said in a statement.
The U.S. Treasury Department, by mid-afternoon, had not responded to a request for comment on the automakers plea.
Japan is stuck in its fourth recession since 2000, and its export-reliant economy is suffering from a strong yen.
New Japanese Prime Minister Shinzo Abe, eager to get Japan growing again, has complained about the value of the yen and put pressure on the Bank of Japan to further ease monetary policy, by doubling its annual inflation target to 2 percent.
The yen plummeted in trading against the dollar on Thursday as investors bet that the Bank of Japan will soon embark on aggressive policy easing.
But while quantitative easing by the Bank of Japan "may have an effect on the exchange rate, it is not the same as outright currency intervention," Mireya Solis, an expert in Japan's foreign economic policies at the Brookings Institution, said.
"Moreover, the U.S. would be hard pressed to criticize Japan as the Fed has also resorted to quantitative easing to avoid deflationary pressures," she added.
Forecasts of aggressive action by the Bank of Japan to weaken the yen have driven the dollar sharply higher in recent months, with the greenback gaining nearly 11.3 percent in the fourth quarter of 2012 and 3.6 percent so far this year.
The United States has long had an auto and auto parts trade deficit with Japan, totaling more than $50 billion in 2012.
A weaker yen would make Japanese auto exports even more competitive in the United States. However, Japanese manufacturers also make many cars in the United States, which they argue lessens the impact of any currency swing.
Slightly more than 90 percent of Honda (7267.T) and Acura vehicles sold in the United States were produced in North America, according to the company.
Last month, Honda announced its exports from the United States had reached 1 million autos, and it expected to export more cars from North America within two years than it imports from Japan.
Blunt argued that U.S. monetary policy is not aimed at deliberately devaluing the dollar, but that Japanese government statements make clear Tokyo's plan is to weaken the yen.
That allows that Japanese auto industry to maintain its "tremendous over capacity" and avoid the painful restructuring the U.S. auto sector has made, Blunt said.
(Additional reporting by Julie Haviv in New York, editing by Phil Berlowitz and Leslie Adler)
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