Japan's Unspoken Currency Manipulation by Monetary Policies: A Chinese Lawyer's Perspective

• Author: Xin Chen
• Pages: 161-179

China

161

VII JEAIL 1 (2014)

Xin Chen

∗

During the past few years, the Bank of Japan has injected billions of yen into the

economy and pursued a monetary easing policy. Japan has plausible arguments,

namely that its current policies are needed to support the growth of the economy and

      

trade imbalances between Japan and other Asian countries, particularly China. This

article argues that Japan’s practice is rooted in protectionism and examines such

actions under the IMF Agreement and the WTO system. It is suggested that the

    

to return to normal monetary policies.

Keywords

Devaluation, Yen, Quantitative Easing Policies, Exchange Rates

Manipulation, IMF, WTO

Japan

’

s Unspoken

Currency Manipulation

by Monetary Policies:

A Chinese Lawyer

’

s

Perspective

∗ Associate Professor of Xiamen University Faculty of Law. LL.B./LL.M./Ph.D.(Xiamen). ORCID: http://orcid.

org/0000-0001-6051-8256. The author may be contacted at: echoflying@hotmail.com / Address: School of Law,

Xiamen University 422 South Siming Road, Xiamen, China 361005.

DOI: http://dx.doi.org/10.14330/jeail.2014.7.1.08

REGIONAL FOCUS & CONTROVERSIES

2014-05-23 오후 2:29:43

162 Xin Chen

1. Introduction

Since Shinzo Abe became prime minister of Japan on December 26, 2012, the Bank

of Japan (“BoJ”) has introduced a series of economic reform to correct its current

economic recession.

1

As traditional monetary policies have limits in combating

     

at depreciating the Japanese yen. These measures have resulted in substantial

depreciation of the yen  other currencies. The depreciation of yen has helped

to bolster Japanese exports, but is at the expense of Japan’s trading partners.

While there are many commentaries on this issue, most of which focus on

economic or political implications.

2

This research, however, will provide an in

depth analysis of whether Japan’s policy could be challenged under relevant

international treaties including the IMF Agreement, Article XV of the GATT 1994,

or the Subsidies and the Countervailing Measures Agreement [hereinafter SCM

Agreement]. It will discuss what kinds of remedies would be available if Japan

     

parts including Introduction and Conclusion. Part two will provide background on

Japan’s monetary policies and the criticisms against them. Part three will examine

the rules and regulations under the IMF that govern the ‘exchange arrangements’

and “exchange rate policies.” Part four will clarify the relationship between exchange



to Japan’  

    

legal strategies to encourage a change in Japan’s monetary policies.

1D. Pilling, Premise of Shinzo Abe’s Economic Plan is that 15 Years of Deflation Have Sapped Japan’s ‘Animal Spirits,’

Financial Times, Jan. 2, 2014, available at http://www.ft.com/intl/cms/s/0/c26bc078-673d-11e3-a5f9-00144feabdc0.

html#axzz2ws0OYKqB (last visited on Apr. 17, 2014).

2See generally Bonkwan Koo, Abenomics, Finally a Solution to Revive Japan?, 6 SERI Q. 30 (2013); A. Field,

Japan’s Three-Arrow Attack, 14 J. com., 19 (2013); A. Pereira & S. Allard, Recent Development: Looking to Fill

an International Regulatory Gap: Brazil Brings the Issue of Exchange Rates and Trade Before the World Trade

Organization, 26 emory inT’l l. rev. 535 (2012).

2014-05-23 오후 2:29:43