Trump says Japan, China, and Germany ‘play the market’, guilty of ‘global freeloading’

Japan has rejected Donald Trump’s claims that Tokyo was deliberately weakening the yen to gain an unfair trade advantage over the US.

Trump told a meeting of pharmaceutical companies on Tuesday that Japan, along with China and Germany, were guilty of “global freeloading” for using regulation and currency devaluation in their trade dealings with the US.

The president’s trade adviser, Peter Navarro, also accused Germany of using a “grossly undervalued” euro to gain an unfair advantage over the US and other EU countries.

In unusually frank comments, Japan’s chief cabinet secretary, Yoshihide Suga, said Trump’s criticism “completely misses the mark”. Suga added that the Bank of Japan’s pursuit of monetary easing was intended to boost inflation, not weaken the yen against the dollar.

Japan’s policy was in line with G7 and G20 agreements, he said, adding that Tokyo would continue to respond to “one-sided” currency moves by other countries.

Vowing to end the emasculation of US trade, Trump’s said: “You look at what China’s doing, you look at what Japan has done over the years. … they play the money market, they play the devaluation market and we sit there like a bunch of dummies.”

According to a transcript of Tuesday’s meeting, Trump said other countries “live on devaluation”.

Trump’s outburst, which suggests he could backtrack on his wish to see higher US interest rates, came at the end of the worst January for the dollar for three decades.

But that follows a huge rise in the dollar on the back of his election win in November when promises of a huge stimulus for the US economy sent the greenback to 14-year highs. The yen was one of many Asian currencies that pushed lower as a result but, falling more than 10% against the dollar since Trump’s election victory.

The US currency briefly fell to 112.08 yen in Tokyo on Wednesday, but later recovered to around 113 yen as investors sensed a bargain.