Japan on Wednesday said South Korea would face scrutiny over its repeated moves to weaken the won and called on China to act “responsibly” amid escalating fears of a global currency war.
The comments illustrate flaring tensions over a devaluation battle that is set to dominate a Group of 20 summit of the world’s top economies in South Korea next month as nations look to curb capital inflows and safeguard exports.
“Obviously, the devaluation race will become a major topic” at the G20 meetings chaired by Seoul, Japanese Finance Minister Yoshihiko Noda said during a parliamentary session in Tokyo Wednesday.
Because of its “repeated interventions” to weaken the won, “as the chair, South Korea and its role will be seriously questioned”, he added.
Japanese exporters have struggled with a yen that is near 15-year highs against the dollar, drawing comparisons with their South Korean counterparts who have seen their competitiveness boosted by efforts to keep the won lower.