By Takeshi Kawanami in Washington
In an exclusive interview with Nikkei, Jason Furman, chairman of the U.S. President’s Council of Economic Advisers, asked that Japan avoid a currency war.
Discussing U.S. policy on Japan, Furman cautioned Japan against engaging in yen-selling intervention, pointing out that “Japan agreed with the advanced nations to avoid competitive devaluations.” He asserted that exchange rates “should be determined by the market and based on economic conditions.” Furman indicated that many international organizations regard an exchange rate of around 105 yen to a dollar to be the appropriate level, so the present situation does not constitute excessive yen appreciation.
Furman welcomed the Abe administration’s decision to postpone the consumption tax increase. He pointed out that the Japanese economy is plagued by weak demand, population decline, and low productivity. He said that the present administration’s policies to increase women’s participation in the work force are “very important and producing results.”
Furman stated that the TPP is a “top priority of the Obama administration.” He emphasized that the administration will aim for ratification by the “lame duck Congress” after the presidential election in November. While acknowledging that there is opposition to the TPP “out of concerns about free trade (such as losing jobs and so forth),” he noted that since the TPP’s goal is to remove a wide range of trade barriers, it will actually “alleviate concerns about free trade.” (Abridged)