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| Commodity News |
| HeadLine : |
Political heat prods Japan, South Korea to team up on weak currencies |
| Date : |
Apr 22 2024 |
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The success of Japan and South Korea at inserting language voicing concern over their currencies in a joint statement with the U.S. this week underscores the political heat they face from stiff inflation that is being aggravated by weak exchange rates.The matter is all the more urgent with Middle East tensions threatening to push up oil prices and accelerate cost pressures that have already exacted a domestic political toll on both governments. For the U.S., the statement was a small price to pay to placate a pair of allies it needs to keep on board with a more strategic goal of containing China.The U.S. dollar has appreciated broadly this year on prospects for a delay in the U.S. Federal Reserve's shift to interest rate cuts, but the yen and won have weakened far more against the greenback than most other currencies. On the heels of the statement, the yen rebounded as markets braced for the risk of intervention, with some traders flagging the possibility of coordinated action along the lines of the 1985 "Plaza Accord." The won stabilized as well.
Source: Reuters
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