The falling Japan yen is making Asian economies uncompetitive, including South Korea, Indonesia and especially India, which is noted to have the lowest currency value in Asia for 2015, dragging the continent into a "currency war."
The Indonesian rupiah, Malaysian ringgit, Thai baht and other currencies had been sliding gradually against a broadly strong U.S. dollar this year, Reuters reported.
The yen dropped to a 13-year low on Friday, dragging down all other Asian currencies with it.
An adviser to India's finance minister associates said the fall of economic growth in India was not just due to weak global demand but also because of the currency-weakening monetary policies that Japan and euro zones pursue.
"Call it competitive devaluation, currency war or something else, the fact is such policies are having and will have implications for trading partners. We cannot afford to let our currency become less competitive," the adviser said, according to Business Standard.
Inflation isn't as much of an issue as it was in the past, which makes it easier for Asia to deal with weaker currencies, Reuters reported. Asian central banks have bigger currency reserves. The marketers from these countries are more flexible, and foreign investment has become less volatile.
Authorities in Asia have been subtly lowering their currencies without easing the policies employed in Japan and Europe.
