The President of the united states Donald Trump stated that he had warned the leaders of Japan and China against devaluing their currencies, arguing that such actions were unfair to the United States.
Trump’s remarks added to market concerns as new tariffs took effect on Tuesday. His administration imposed a 25% tariff on imports from Mexico and Canada, while also doubling duties on Chinese goods to 20%, further escalating global trade tensions.
The uncertainty surrounding U.S. trade and currency policies had an immediate impact on Japan’s economy. The Nikkei benchmark index fell nearly 2% on Tuesday, as Trump’s statements led to a surge in the yen’s value. The currency briefly strengthened to 148.60 per dollar, up from around 150 the previous day.
“I’ve called President Xi, I’ve called the leaders of Japan to say you can’t continue to reduce and break down your currency,” Trump said. “You can’t do it because it’s unfair to us. It’s very hard for us to make tractors, Caterpillar here when Japan, China, and other places are killing their currency, meaning driving it down.”
Trump suggested that instead of repeatedly addressing the issue through diplomatic conversations, the U.S. could counterbalance the disadvantages faced by its manufacturers by imposing tariffs.
Japanese Finance Minister Katsunobu Kato responded to Trump’s comments by stating that Japan was not actively pursuing policies to weaken the yen. He emphasized that Japan had reaffirmed its stance on currency policy in discussions with G7 countries and during bilateral talks with U.S. Treasury Secretary Scott Bessent on January 29.
Trump had previously accused Japan and China of deliberately weakening their currencies during his first term as president. A series of U.S.-China tariff measures between March 2018 and May 2020 contributed to a more than 12% depreciation of the Chinese yuan against the dollar.
More recently, China has focused on stabilizing its currency. On Tuesday, the yuan edged higher against the dollar, with the Chinese central bank guiding the currency to firmer levels—a move some analysts interpreted as an effort to ease tensions with Washington.
