The economies of Brunei, Laos, Cambodia, Myanmar and Vietnam have something intriguing in common: Each produces less annually than the ¥9 trillion (US$76 billion) Japan has spent since January weakening the yen.
The irony is that these nations constitute half of the 10 countries with which Japan wants to build closer economic ties.
Finance Minister Masajuro Shiokawa came here to Manila last week to bolster trade and cooperation with the 10 members of the Association of Southeast Asian Nations (ASEAN).
Yet with Japan spending the equivalent of entire Southeast Asian economies to make its exports more competitive, Tokyo clearly has a unique definition of "cooperation" in mind.
Japan's currency policies are a sensitive issue here in Southeast Asia and they may only become more controversial. Damaging, too.
Tokyo's beggar-thy-neighbor approach is hardly good news for Asia's economies; holding down the yen means Japan grabs a bigger share of the region's export business. And there are two reasons efforts to lower the yen may increase as the year unfolds.
First, China's currency policy may encourage Tokyo to weaken the yen more aggressively. The yuan is pegged to the US dollar, and China became more competitive over the last 12 months as the dollar slid 14 percent versus the euro. Chinese officials are making it clear they're not about to let the yuan rise.
Second, a US recovery isn't panning out as hoped. That could lower the dollar at a time when many Asian stock markets are offering two, three or four times the returns investors got in the Dow Jones Industrial Average and Standard & Poor's 500 so far this year. A weaker dollar will boost the yen.
Shiokawa couldn't have been happy with events here in Manila last week. He came to the Philippines hoping Southeast Asian finance ministers would support his desire to see China's currency rise. They didn't. Jin Renqing, China's finance minister, also said Beijing's yuan policy is "crucial" to global stability.
Japan isn't alone in hoping China will revise the yuan's exchange rate. The Bush administration also appears to be losing patience with an undervalued yuan. US Treasury Secretary John Snow has been raising the issue more and more in speeches and interviews.
So are US industry groups.
Yet it strikes currency observers like David Gilmore of Foreign Exchange Analytics as odd that the US is far less critical of Japan, where tens of billions of dollars have been bought this year to prevent the yen from rising.
"Not only has this unprecedented intervention distorted the dollar/yen relationship but it has impacted and distorted the US Treasury market," Gilmore explains. Dollars bought by Japan to cap the yen end up invested in US government debt. Tokyo has helped fuel what many view as a bubble in the US bond market.
Japan's weak-yen policy arguable does more harm to Asian economies than China's; at least China's booming economy is buying a growing share of exports from its neighbors. As the yen slides, officials in Bangkok, Jakarta, Manila, Seoul and elsewhere also feel pressure to lower their own currencies.
An end-justifies-the-means-argument could be made here.
Japan is by far Asia's biggest economy and if a weaker yen boosts growth there, the entire region will benefit. That might be true if Tokyo were acting to shore up its economy like ridding banks of bad loans. It's not; a lower yen is Japan's only consistent policy these days.
A major theme of last week's ASEAN meeting was cooperation on currencies. Asian nations also want to create a liquid regional bond market and perhaps a euro-like single currency someday.
When it comes to economics, countries tend to act in their own self-interest. Japan, it could be argued, is just more successful at manipulating its currency than neighbors who would do the same thing if they could.
But then why bother putting on a cooperative face with Southeast Asian officials?
Finance ministers here are on to the duplicity of Japan's Asia policies. They know Tokyo wants closer trade ties with Southeast Asia and the benefits that come with it. But they're also aware Tokyo is more than happy to undercut far less affluent economies with a cheaper yen.
There's little public griping about Tokyo because Asians don't want to bite the hand that feeds them.
Many countries here benefit from Japan's overseas development assistance program, which offers billions of dollars in aid. Yet resentment may grow over Japan's beggar-thy-neighbor currency strategy. And it should.
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