President Donald Trump of the United States said he told the leaders of Japan and China they could not continue to reduce the value of their currencies, stating that doing so would be unfair to the United States.

 

Trump’s remarks added to market jitters as his new 25% tariffs on imports from Mexico and Canada took effect on Tuesday, along with a doubling of duties on Chinese goods to 20%, in a fresh escalation of global trade tensions.

 

While emphasizing the risk that Japan’s export-reliant economy faces from uncertainty over Washington’s currency and tariff policies, the Nikkei benchmark tumbled nearly 2% on Tuesday as Trump’s comments drove up the yen.

 

The yen briefly climbed to 148.60 per dollar on Tuesday, up from around 150 on Monday.

 

“I’ve called President Xi, I’ve called the leaders of Japan to say you can’t continue to reduce and break down your currency.

 

“You can’t do it because it’s unfair to us. It’s very hard for us to make tractors, Caterpillar here, when Japan, China and other places are killing their currency, meaning driving it down,” Trump said.

 

He added that instead of complaining repeatedly over the phone on such attempts, the United States could make up for the disadvantage its manufacturers suffer by imposing tariffs.

 

Japanese Finance Minister Katsunobu Kato, when asked about Trump’s comments, said Tokyo was not adopting policies directly aimed at weakening the yen,

 

“Japan has confirmed its basic stance on currency policy” with G7 countries and the United States, including at two-way talks with U.S. Treasury Secretary Scott Bessent on Jan. 29, Kato said.

 

Trump had accused Japan and China of intentionally weakening their currencies in his first term as president.

 

A series of tit-for-tat US-China tariff announcements drove the Chinese currency down more than 12% against the dollar between March 2018 and May 2020.

 

Recently, China has focused on stabilising its currency’s moves.

 

The yuan inched higher against the dollar on Tuesday as the central bank continued to guide the currency firmer, a move some analysts saw as aimed at easing friction with Washington.