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When a population saves a lot, the funds are invested outside the country as well as inside. If the Japanese invest in the United States, it pushes their exchange rate down and makes their manufacturing more competitive.

We have believed for many years, much earlier than anyone else was talking about this issue, that it was in the interest of China to evolve to a more flexible exchange rate system.

Ultimately, in the long run we need to immunise our system from being overly responsive to fluctuations in the exchange rate; that is, people should, by and large, be reasonably hedged, or they should borrow more in domestic currency rather than foreign currency.

I am advocating a weak yen to a certain extent.

The principal linkages between Japan and the U.S. global economies are trade, financial markets, and commodity markets.

To achieve a more balanced international system over time, countries with excessive and unsustainable trade surpluses will need to allow their exchange rates to better reflect market fundamentals.

What there is no dispute about is whether or not China is a currency manipulator. They are a currency manipulator. They actively intervene every single day to keep the value of their currency less than it would be against the dollar than if it floated freely. We think. Even China barely disputes that.

Well, I make a practice of not commenting on the role of the relative exchange value of our currency.

There are still people in Japan who think money is something evil.

A common currency imposes on us a duty to cooperate more on policy.