Finance ministers from the world’s biggest economies met in Japan to discuss global growth and reaffirmed their pledge not to deliberately weaken their currencies to stimulate growth.
While others agreed, the Japan’s Minister of Finance Taro Aso has reiterated his stance that recent gain in the yen has been one sided and speculative. His statement also hints at growing frustration inside Japan’s government about the effect on exports after the currency gained 10 percent this year.
The U.S Treasury Secretary Jacob J.Lew on Saturday object to the statement saying the yen’s movement hasn’t been overly volatile and that there is no reason to intervene to weaken the yen.
Japan’s Aso:
- “I can understand if the currency moves up or down over time, but if you look at it over the last few weeks, you’ve got moves of 5 yen in a few days, or 8 or 9 yen. You can’t clearly say that that’s orderly.”
- From the U.S. standpoint, the yen had weakened from around 70 against the dollar to around 120, so “it’s natural” for them to say that the current moves are orderly.
- “They have an election and we have an election and we both have TPP talks. There are various things on our plates and we of course have to say various things as that’s our jobs. I think we always have to be careful to communicate so that emotion doesn’t get in the way of our talks.”
U.S.’s Lew:
- “I have been clear on our analysis of current exchange-rate movements — it’s a pretty high bar to have disorderly conditions.”
- “It’s important that the G-7 again reiterated the positions that we’ve taken in the past, which are very important, which is a commitment to refrain from exchange-rate targeting. And I think it’s important that at the G-20 we had an agreement to refrain not only from competitive devaluation but to communicate so that we do not surprise each other.”
The meeting, which brought together finance ministers and central bank governors from Canada, Britain, Canada, Italy, Germany, Japan, France and the U.S., and representatives from the World Bank, International Monetary Fund and European Union, highlighted the risks from refugee flows, political conflicts, terrorism and the possibility of a U.K. exit from the European Union.
