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China, South Korea alarmed as yen slide threatens exporters

Published on Dec 30, 2013 6:27 PM

SEOUL (REUTERS) - China and South Korea's anxiety over the rapidly falling yen came to the fore on Monday as senior officials said their exporters could be hurt by Japan's attempts to pull its moribund economy out of a two-decade slump.

Beijing and Seoul understand the need for Tokyo to revive its US$5 trillion (S$6.34 trillion) economy and escape persistent deflation.

But they are worried that the massive monetary and fiscal stimulus championed by Japanese Prime Minister Shinzo Abe has sharply weakened the yen and put their exporters at a disadvantage in global markets.

So far, Chinese and South Korean officials have refrained from direct action to maintain competitiveness, such as intervening by buying dollars in currency markets, but there is a risk of a response if their export sectors are severely hampered.

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