The U.S. Treasury said on Thursday it was strengthening scrutiny of countries’ foreign exchange practices, including their interventions to resist both depreciation and appreciation against the dollar, but it did not accuse any major trading partner of currency manipulation. In its latest semi-annual currency report, the Treasury said no major trading partner met all three criteria for enhanced analysis of currency practices during the last half of 2024 and the first six months of 2025.
The Treasury added Thailand to its “monitoring list” of countries warranting close attention due to the growth of the Asian country’s global current account surplus and its trade surplus with the U.S. The addition brings the monitoring list to 10 economies, with China, Japan, South Korea, Taiwan, Singapore, Vietnam, Germany, Ireland and Switzerland also remaining on the list.
The report has traditionally focused on whether countries are engaging in one-sided currency intervention or other manipulation to resist appreciation against the dollar to keep their exports cheaper. But going forward, the Treasury said it “is now monitoring more broadly the extent to which economies that choose to smooth exchange rate movements do so to resist depreciation pressure in the same manner as they do to resist appreciation pressure.”
NO SPECIFIC COUNTRY TARGETED Asked if the change was meant to scrutinize Japan’s currency practices more closely amid recent yen weakness, a Treasury official said the changes were not meant to single out any one country, but to aid the department’s analysis during periods covered by future reports, during which the dollar has weakened against major currencies. The next report, due in November, will include the second half of 2025.
The official said that in particular, the Treasury would be looking to see whether countries’ interventions to resist depreciation against the dollar are symmetrical with their efforts to resist appreciation, or less aggressive. Japan has been battling a weak yen, with policymakers using calibrated communication to drive the currency higher against the dollar without resorting to large-scale market intervention.
Tokyo’s efforts won tacit backing from U.S. authorities after the New York Federal Reserve conducted dollar/yen rate checks last week – considered a possible intervention precursor move – a source familiar with the matter told Reuters. But U.S. Treasury Secretary Scott Bessent on Wednesday said the U.S. was “absolutely not” intervening to support the yen. The dollar index, which measures the greenback against a basket of currencies, edged higher on Thursday for a second straight day after touching its weakest level since February 2022 on Tuesday.
OTHER INFLUENCES MONITORED The Treasury also said that for countries on the monitoring list, it will analyze whether other government policies are influencing foreign exchange markets, such as capital controls, macroprudential measures or the use of government investment vehicles or pension funds.
The Treasury also will study countries’ use of foreign exchange swaps to sterilize or offset spot interventions to minimize their impacts on domestic monetary conditions, as well as trading partners’ net forward positions. Traditionally, the Treasury’s three main criteria for analyzing foreign exchange and determining manipulation are a trade surplus with the U.S. of at least $15 billion, a global current account surplus above 3% of GDP and persistent, one-way net foreign exchange purchases that reach 2% of GDP. Countries that meet two of these are automatically added to the list.
The Treasury did not label China a currency manipulator, avoiding a potential escalation in trade tensions with Beijing, despite what it called “depreciation pressure” facing its yuan currency. But the department said China “stands out among our major trading partners in its lack of transparency around its exchange rate policies and practices,” repeating language from its previous report in June 2025. “This lack of transparency will not preclude Treasury from designating China if available evidence suggests that it is intervening through formal or informal channels to resist (yuan) appreciation in the future,” Treasury said.
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