Ford Motor Company (F) CEO Alan Mulally told Bloomberg Tuesday that Japan’s monetary policies are giving an unfair advantage to Japanese automakers.
“The most important thing that most countries around the world believe in is letting the markets determine the currency,” Mulally told Bloomberg’s Susan Yi. “That’s just so important to all of us in the international trading system.”
The yen has fallen 15% against the U.S. Dollar since mid-November after Japanese Prime Minister Shinzo Abe announced that Japan would pursue aggressive monetary easing to jumpstart economic growth. Japan, the world’s third largest economy, has suffered from deflation and stagflation for two decades. A weaker yen could help revive Japan’s export industry and reverse the country’s economic ails.
Japan’s competitors in the U.S. and Europe have criticized Japan’s plan to devalue its currency, arguing that it gives Japanese companies and Japanese exports leverage in overseas markets. In January U.S. automakers visited the White House to bring attention to what they view as anti-competitive policies by the Japanese.
Matt Blunt, president of the American Automotive Policy Council, told Reuters that efforts by the Japanese government and Bank of Japan to drive down the value of the yen was "currency manipulation.”
"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.
Foreign countries have attacked the U.S. Federal Reserve over its quantitative easing policies. Last September Guido Mantega, Brazil’s finance minister, warned that the Fed’s actions were “protectionist” and could lead to currency wars.
Whether a weaker yen affects U.S. sales of Japanese cars and trucks is still to be determined. Toyota, the world’s largest automaker, said it sold 166,000 vehicles in the U.S. last month, a 4.3% increase from a year ago. Ford reported February sales of 195,000, a 9.3% year-over-year jump, and General Motors (GM) said sales rose 7.2% to 224,000 vehicles.
Toyota raised its 2013 profit forecast in early February by 10% largely because of the weak yen. The Japanese automaker said net profit was 99.9 billion yen, or $1.1 billion, in the fourth quarter of 2012, a 23.5% increase from a year ago. A weaker yen lowers Toyota’s cost of producing automobiles in Japan. The automaker made 53% of its cars and trucks in Japan last year and exported more than half of them.
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