The U.S. Treasury Department on Wednesday labeled Vietnam and Switzerland as currency manipulators for the first time while keeping Japan and China on the so-called monitoring list of trading partners whose currency practices merit close attention.

India, Thailand and Taiwan were added to the watch list of economies suspected of deliberately devaluing their currencies against the dollar, making it a total of 10 major U.S. trading partners now being monitored by the department over the issue, according to the semiannual report to Congress on foreign exchange policies.

U.S. Treasury Secretary Steven Mnuchin speaks to the media after the closing of a two-day Group of Seven finance meeting in Chantilly, France, on July 18, 2019. (Kyodo) ==Kyodo

The report was released just about a month ahead of President Donald Trump's expected departure from office following his defeat in the Nov. 3 election.

It said that over the four quarters through June 2020, major U.S. trading partners -- Vietnam, Switzerland, India and Singapore -- intervened in the foreign exchange market in "a sustained, asymmetric manner."

Of the four countries, Vietnam and Switzerland have exceeded the criteria used to identify what the department views as potentially unfair currency practices or excessive external imbalances that could weigh on U.S. growth or harm U.S. workers.

"The Treasury Department has taken a strong step today to safeguard economic growth and opportunity for American workers and businesses," Treasury Secretary Steven Mnuchin said in a statement.

The department determines whether a country is manipulating its currency by looking into the extent of intervention in foreign exchange markets and the size of the trade surplus with the United States, among other factors.

On Japan, the report said the world's third-largest economy has not intervened unilaterally in the foreign exchange market since 2011.

But it said Japan posted a "sizable" current account surplus of 3.1 percent of gross domestic product over the four quarters ending in June 2020 and a bilateral goods trade surplus of $57 billion with the United States over the same period.

The yen appreciated 4 percent against the U.S. dollar in 2020 through the end of October, as demand for traditional safe-haven currencies increased amid the coronavirus pandemic. But "the real effective yen remains weaker than average historical levels," the department said.

As economic recovery from the pandemic takes hold, Japan should pursue "structural reforms to reduce macroeconomic imbalances, increase productivity, and raise potential growth while maintaining fiscal flexibility to support growth in the near-term," it also said.

Turning to China, the department said the People's Bank of China, the country's central bank, appears to have refrained from intervening in foreign exchange markets in 2019, but other financial entities, such as state-owned banks, purchased foreign exchange on a net basis over the four quarters through June 2020.

"While intervention proxies do not provide definitive evidence that the PBOC intervened in foreign exchange markets over the review period, this issue warrants further investigation," the department said in the report, calling on China to improve its transparency regarding interventions.

Amid its trade war with Beijing, the Trump administration had labeled China a currency manipulator in August last year, something the United States had not done since 25 years earlier. But it removed the designation in January this year ahead of the signing of a partial trade deal.

In the phase-one trade agreement, China committed to addressing concerns over the manipulation of currency to make its exports more competitive and other issues which the United States deems to be unfair economic practices.

The remaining countries on the Treasury Department's monitoring list were Germany, Italy, Malaysia, Singapore and South Korea.