WASHINGTON (Reuters): The U.S. Treasury said on Thursday that none of its major trading partners manipulated its currency last year, but added Japan to its currency “monitoring list” alongside China, Vietnam, Taiwan, Malaysia, Singapore and Germany, which were in the previous list.

Treasury’s semiannual currency report also found that none of its major trading partners met all three criteria, prompting an “enhanced review” of their currency practices over the four quarters to December 2023.

However, countries that meet two of the criteria – a trade surplus with the US of at least $15 billion, a global account surplus above 3% of GDP and sustained unilateral net foreign exchange purchases – are automatically added to the list.

The Treasury said Japan, Taiwan, Vietnam and Germany met the criteria for a trade surplus and an excessive current account surplus.

Singapore met the criteria for engaging in sustained currency intervention and achieved a significant current account surplus, and Malaysia only met the criteria for a current account surplus, but once listed, it takes two currency reporting cycles to be delisted.

China was placed on the monitoring list due to its enormous trade surplus with the US and the lack of transparency regarding its currency policy.

“China’s failure to publish foreign exchange (FX) interventions and the broader lack of transparency on key features of China’s exchange rate mechanism continue to make China an outlier among major economies and require close monitoring by the Treasury Department,” the Treasury said in the report.

The report also raises doubts about China’s reporting of current account data, which showed that the surplus fell to 1.4% of GDP in 2023 from 2.5% in 2022. The Treasury reported balance of payments data China’s State Administration of Monetary releases on the country’s trade surplus appear to conflict with customs data from China and other trading partners.

A U.S. Treasury official said the department was struggling to understand such “anomalies.”

The official said the Bank of Japan’s recent currency interventions aimed at supporting the value of the yen did not influence the decision to add Japan to its currency monitoring list, citing its high trade and current account surpluses.

However, the Treasury report indicated that Japan intervened in April and May 2024 – outside the reporting period – for the first time since October 2022, buying the yen and selling dollars to shore up the value of the yen.

The Treasury said Japan had maintained transparency in its foreign exchange operations, but added: “Treasury’s expectation is that in large free-trade foreign exchange markets, intervention should be reserved only in very exceptional circumstances and after appropriate prior consultation.”