CINCINNATI (TDB) -- Domestic automakers hammered by Japanese competitors complained for years that Tokyo manipulates the yen, keeping it undervalued and giving that nation's manufacturers a price advantage. In the Big 3's view, jobs have been lost and states like Ohio and Michigan have suffered dearly because Japanese government monetary policy worked to subsidize its automakers. Now, there are signs of a policy shift in Japan that could have an immediate impact in Cincinnati, Cleveland and Detroit.
Today, the JAPANESE RAISED A KEY RATE and the trade group that represents Ford, DaimlerChrysler and General Motors -- three of the largest employers in Ohio -- all hailed the news from overseas. Ailing and losing market share, they have not had much to cheer about lately. And the reports demonstrate how the global economy is tightly weaved -- a decision at the Bank of Japan rebounds instantly in Ohio, where more people read NCAA box scores than bank rate notes.
From CBSMarketWatch, the word came about the rate hike: "In a statement, the BOJ [Bank of Japan] said that the economy is likely to grow moderately and that it would adjust rates gradually, depending on the pace of economic growth and prices. The change marks the first time the central bank has revised monetary policy since July, when it ended its zero-interest-rate policy and set the 0.25% rate."
Immediately, this came from Detroit's lobbying arm in Washington:
"The following statement was released today by the Automotive Trade Policy Council on the Bank of Japan's decision to raise interest rates: The decision by the Bank of Japan to raise interest rates today from the low rates it has maintained for years is a small but welcome first step toward ending its reliance on subsidized exports from its misaligned currency.
"We encourage the Japanese government to take additional action to rebalance its misaligned currency. American businesses and workers are the victims of Japan's policy of maintaining a misaligned and undervalued yen. Growing sectors of the U.S. business community can no longer accept the closing of U.S. manufacturing facilities and loss of American jobs resulting from Japan's trade-distorting policy. With Japan's GDP growth rate now exceeding 4%, there is simply no reason for Japan to hesitate in taking bold and necessary domestic reforms, and to stop the practice of exporting its economic problems to its trading partners by undervaluing its currency."
The Automotive Trade Policy Council, Inc. (ATPC) is a Washington, D.C.-based nonprofit trade association that represents the common international economic, trade and investment interests of its member companies: DaimlerChrysler Corporation, Ford Motor Company and General Motors Corporation.
Just a year ago, the ATPC told the Senate Democratic Policy Committee that it estimated Japan's carmakers had a $3,000 to $10,000 cost advantage. That seems to have eased a bit today.