Japan signals it will not pressure China on yuan

TOKYO (AFP) – Japan's finance minister signalled Friday that he will not pressure China to revalue the yuan during weekend talks in Beijing.

"I'm sufficiently aware that this issue is important," Naoto Kan said at a regular press conference, Dow Jones Newswires reported.

"But I don't think it is necessarily good to act in a way that could be taken as putting pressure" on China, he said.

File photo of Japanese Vice Prime Minister and Finance Minister Naoto Kan (AFP file)

International disquiet has grown over the yuan, which critics say is undervalued by as much as 40 percent against the dollar, giving Chinese exporters an unfair advantage.

Washington has led the charge in ramping up the pressure on Beijing to let the yuan appreciate. It has been effectively pegged at about 6.8 to the US dollar since mid-2008.

US lawmakers on both sides of the political aisle have blamed the yuan for the country's burgeoning trade deficit with China, which soared to nearly 227 billion dollars in 2009.

US lawmakers are pushing Treasury Secretary Timothy Geithner to label Beijing a "currency manipulator" in a report due April 15.

Currently the yuan may rise or fall 0.5 percent against the dollar each day from a mid-point set by the China's central bank and three percent for non-dollar currencies such as the euro and Japanese yen.

However Chinese media reports this week said the government is reviewing proposals to adjust its currency exchange rate system this month, include giving the yuan more flexibility.

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