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The makings of a yen vs yuan currency war

Japan’s weakening of the yen is pressuring China to do the same in what could start an avalanche of competitive devaluations

by William Pesek June 28, 2023June 29, 2023

China and Japan face monetary dilemmas at the outset of 2024. Image: Getty / Screengrab / Al Jazeera

TOKYO – The yen’s 10% tumble so far this year has the makings of the kind of wildcard that global investors hate.

Granted, Asian governments from Seoul to Jakarta are plenty used to Tokyo’s mercantilist predilections. Since the 1990s, the biggest consistency among the blur of Japanese leaders who came and went is maintaining a weak yen to juice exports.

Today’s government headed by Prime Minister Fumio Kishida seems more than happy to keep this cycle going. Yet there is good reason to worry Tokyo is courting more trouble than ever before.