Yellen Meets Japan, South Korea Counterparts In Bid To Boost Economic Ties
Three-way collaboration between the US and its top two allies in Asia extended Wednesday to the field of finance as Treasury Secretary Janet Yellen met her Japanese and South Korean counterparts.
(Bloomberg) -- US Treasury Secretary Janet Yellen took note of worries between her Japanese and South Korean counterparts over sharp declines in their exchange rates, in a joint statement following a debut trilateral finance meeting.
Yellen, Japanese Finance Minister Shunichi Suzuki and South Korean Finance Minister Choi Sang-mok discussed currencies on Wednesday in Washington on the sidelines of the International Monetary Fund-World Bank spring meetings, according to the joint statement released by each side.
The three will “continue to consult closely on foreign exchange market developments in line with our existing G-20 commitments, while acknowledging serious concerns of Japan and the Republic of Korea about the recent sharp depreciation of the Japanese yen and the Korean won,” they said in a statement.
The yen has fallen about 9% and the won has dropped roughly 7% this year against the dollar, causing Japanese and Korean officials to ramp up warnings about the moves. The US currency has strengthened against major counterparts this year as the resilient US economy with sticky inflation reduced prospects for Federal Reserve interest-rate cuts.
Past agreements among members of the Group of 20 emerging and advanced economies emphasize the principle of allowing markets to determine exchange rates, while leaving the door open to action against excess market volatility.
Before Wednesday’s meeting, both South Korean and Japanese officials had aired concerns about their currencies slumping to multi-year lows against the dollar this week. Choi and Suzuki expressed “serious concerns” over the recent weakening of their currencies and warned of taking appropriate steps to counter any drastic volatility, South Korea’s government said in a statement after a bilateral meeting between the two.
The three also on Wednesday confirmed their commitment to coordinate on sanctions against Russia and North Korea and collectively deal with issues regarding supply-chain vulnerabilities, economic coercion and overcapacity.
In addition, they reaffirmed the importance of Pacific Island countries, where the US and China have been competing to build influence since the Solomon Islands in 2022 signed a security accord with Beijing — a first for the region — raising concerns about a possible Chinese military base in the neighborhood.
The first trilateral gathering of financial chiefs follows the landmark trilateral summit in August between US president Joe Biden, Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk Yeol at the Camp David presidential retreat. The three nations have been strengthening defense and economic security cooperation, trying to de-risk supply chains from exposure to China and teaming up on key technologies like semiconductors and artificial intelligence.
--With assistance from Eunkyung Seo.
(Updates from first paragraph with joint statement.)
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