U.S. officials said Friday they will "closely monitor" Japan's currency policies
"and the extent to which they support the growth of domestic demand."
In its semi-annual report to Congress on international economic and exchange
rate policies, the Department of the Treasury said many major emerging market
economies,especially in Asia, are exercising tighter management of exchange
rates but there is a "need for greater exchange rate flexibility and
transparency in these economies, most notably in China."
The report concluded that, as of early April, China's efforts at currency
appreciation and "a more market determined exchange rate," since Beijing moved
off its exchange rate peg in 2010, have resulted in a 10.0 percent appreciation
of the renminbi against the U.S. dollar.
"In real terms, after adjusting for relative changes in domestic prices, the RMB
appreciated by 16.2 percent from June 2010 through February 2013," the report
said.
"China has taken a series of steps to liberalize controls on capital movements,
as part of a broader plan to move to a more flexible exchange rate regime."
The report concluded the standard under U.S. law regarding rate of exchange
manipulation "for purposes of preventing effective balance of payments
adjustments or gaining unfair competitive advantage in international trade
during the period covered in this report has not been met with respect to
China."
However, the report also concluded the renminbi remains "significantly
undervalued" and said "further appreciation of the (renminbi) against the dollar
is warranted."
The report said the department will monitor exchange rates in the economies
covered by the study.
"Treasury will closely monitor Japan's policies and the extent to which they
support the growth of domestic demand," the report said. "In addition, Treasury
will pay particular attention to the pace of (renminbi) appreciation, and press
for further policy changes that yield greater exchange rate flexibility, improve
transparency, level the playing field for American workers and businesses, and
support a strong, sustainable, and balanced global economy."
