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Detroit big three put the muscle to Japan Inc.






"Japan, Inc. The Detroit Three are on the muscle again over the Japanese government's relentless manipulation of the yen. Calling the yen "the most misaligned currency in the developed world today," the Chief Economists from the three major U.S. automakers yesterday urged the U.S. government to work with other countries to take immediate action to address serious problems caused by Japan's misaligned currency. In joint remarks, they called on the new Japanese government to dramatically change direction and allow the yen to strengthen to reflect its true value (by their estimates the yen is undervalued by 30 percent). The Chief Economists warned that the lack of action by the U.S. government and international monetary agencies has not only created a competitive imbalance to U.S. automakers, but has also created huge distortions and dangers to global financial markets. The Detroit Three are making this point because even in this era of a weakening dollar, the yen is still being kept from appreciating by the Japanese government. Detroit is pressing the issue through its Automotive Trade Policy Council lobbying group, asking that the U.S. government and other concerned nations urge the International Monetary Fund to enforce its new rules designed to identify and sanction, if necessary, countries engaging in improper currency manipulation. Why is this such a big deal? The Detroit auto companies insist that the artificially undervalued yen is giving the Japanese automakers anywhere from a $4,000 to $12,000 bonus for each vehicle imported from Japan (Japanese car companies import two million vehicles a year to the U.S. market, on top of the vehicles they manufacture here), which presents an insurmountable disadvantage for the Detroit Three. What degree does the Japanese government "step in" to ensure that the yen doesn't appreciate against the dollar? Detroit automakers estimate that "Japan, Inc." has spent $400 billion since 2002 in currency markets to keep the yen in check. "

Elaine Meinel Supkis

Thanks for that news, Canuck! I was thinking it was about time they began to hammer on Japan again.

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