STEVE INSKEEP, HOST:
The United States and Japan took steps together to hold up the value of Japan’s currency. I’ve got a yen to hear from NPR’s Anthony Kuhn.
ANTHONY KUHN, BYLINE: Last Friday, the U.S. and Japanese governments cooperated in selling billions of U.S. dollars and buying Japanese yen. The move helped to halt the slide of the yen, which was at a nearly 40-year low to the dollar. Speaking to reporters on Air Force One, President Trump explained it this way.
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PRESIDENT DONALD TRUMP: Because we have a good relationship with Japan. We’re very strong, very, very strong financially. And they are – you know, they have a weakening yen, and they wanted a little bit of help.
KUHN: Trump said propping up the yen helps the U.S. financially. A stronger yen makes Japanese exports less competitive and cuts Japan’s trade surplus with the U.S. It also makes it less likely that Japan will sell its large holdings of U.S. Treasury bonds, which could raise the cost of borrowing for U.S. consumers. Trump added that it was an ally-like thing to do.
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TRUMP: We’re always there for Japan. Japan’s been very good to us, with the exception, of course, of Pearl Harbor.
KUHN: Japan’s surprise attack on Pearl Harbor in 1941 prompted the U.S. to declare war on Japan and enter into World War II. Jeffrey Hall, an expert on Japanese politics at Kanda University of International Studies outside Tokyo, says that many Japanese see Trump as erratic but not hostile, especially to its female prime minister, Sanae Takaichi.
JEFFREY HALL: She’s avoided ever really criticizing him and he has called her one of his biggest fans. And so Japanese people maybe are happy that Prime Minister Takaichi is getting some help with the currency issue because Trump is president.
KUHN: Hall adds that a weak yen means Japanese consumers are getting hammered by high prices for imported food and fuel. On the other hand, Takaichi’s own fiscal policies have weakened public confidence in the yen, contributing to its slide against the dollar.
HALL: Takaichi is a believer in spending more without having to pay for it with taxes. She thinks that lower taxes will make people want to spend more in the economy.
KUHN: Hall says that government intervention may not address the long-term decline of the yen, but it may, in the short term at least, shore up Takaichi’s sliding approval ratings.
Anthony Kuhn, NPR News.
(SOUNDBITE OF 3ND’S “WALTZ FOR LILLY”) Transcript provided by NPR, Copyright NPR.
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