UBUD, Bali -- In a fruitless and pointless exercise, economic policymakers and businesses fret endlessly over the international value of currencies. This is because interventions to guide foreign-exchange valuations tend to be costly and may have only a temporary effect at best.
Over the past year, the dollar's value measured by a trade-weighted index against a basket of currencies has declined by at least 10 percent. One reaction to this change has been the lobbying efforts of the National Association of Manufacturers and the American Farm Bureau Federation against a strong dollar, suggesting that a weaker dollar is "good" for the U.S. economy.
Meanwhile, other countries believe that the relative strengthening of their currencies is bad for their economies. And so it is that central bankers and finance ministers in Japan and China have been accused of playing games that hinder the exchange rate of their currencies from appreciating against the dollar. While Beijing resists revaluing its long-held peg of the yuan against the dollar, Tokyo has spent a staggering $172 billion to try to keep the yen from rising further.