U.S. automakers: Japan profits fueled by cheap yen

WASHINGTON -- U.S. automakers accused the Japanese government on Monday of showering more than $2 billion in windfall profits on Japanese automakers in the past quarter by artificially depressing the value of the yen.

"It's not us making this up. It's the balance sheets of the Japanese automakers" that show the companies are earning big profits from the low value of the yen, said Stephen Collins, president of the Automotive Trade Policy Council, which represents General Motors, Ford Motor Co. and DaimlerChrysler Corp.

"These are windfall profits that we say translate into subsidized exports" to the United States, Collins said.

Even though the Japanese government has not directly intervened in currency markets since March 2004, Japanese government officials have kept the currency artificially low by "jawboning" it down, Collins said.

"Every time the yen starts to move in a substantial way, 'Japan Inc.' and the Japanese finance minister roll out thundering noises" discouraging currency traders from betting on a stronger yen, Collins said.

The latest quarterly reports from Toyota, Nissan, Honda and other Japanese automakers show they earned over $2 billion in windfall profits due to an artificially weak yen, Collins said.

Tokyo's exchange rate policies could easily give Japanese automakers an $8 billion subsidy this year, the Automotive Trade Policy Council said in a statement highlighting the Japanese automakers' recent quarterly earnings.

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