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TOKYO, Japan (October 28th) – The controversy between the US, China and Japan about the value of their respective currencies is sharpening up due to the upcoming 2004 elections in the US. The US dollar, protected by a governmental policy of a strong dollar stands in conflict with the Yuan and the Yen. The controversy […]

TOKYO, Japan (October 28th) – The controversy between the US, China and Japan about the value of their respective currencies is sharpening up due to the upcoming 2004 elections in the US. The US dollar, protected by a governmental policy of a strong dollar stands in conflict with the Yuan and the Yen. The controversy lies in the US standpoint that foreign exchange rates should be left to a free market. What the US needs is actually a lower exchange rate to stimulate export and create jobs at home – and at the same time avoiding a sharp depreciation of the dollar: that would cause an outflow of foreign capital borrowed by the US to cover its gigantic deficit. For China a free floating Yuan would probably mean an appreciation of the currency but this is by no means a certainty.
For Japan the problems lie in the reality that a strong Yen will raise the internal buying power whereas a lower exchange rate will stimulate the export (MH) source: The Japan Times

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