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TOKYO. — A deep divide over currency policy bubbled over at a G7 meeting in Japan yesterday as a senior US Treasury official warned against Tokyo’s bid to tame the resurgent yen. Japan, which is hosting the two-day talks, is keen to win an endorsement for its position that fiscal stimulus is the way to kick-start the world economy, after a rally in the yen hit exporters and worsened a slowdown at home.
But Tokyo’s recent threat of a market intervention to reverse the rally is putting it on a collision course with its G7 counterparts, including the United States and Germany, which have ruled out such moves.
Yesterday, a senior US Treasury official said the yen’s strengthening did not justify Tokyo manipulating its currency. “The notion that exchange rate targeting is being used creates a whole different set of questions in terms of reason for it,” the official told reporters.
“If the perception or the reality is that (intervention) is for gaining unfair advantage, that is very disruptive to the global economic system.” French Finance Minister Michel Sapin has also waved off the idea of countries gaining a trade advantage by manipulating their own currencies.
Other items being discussed include terrorist financing and offshore tax havens at the heart of the Panama Papers investigation. A debt relief deal for Greece and Britain’s referendum on its future in the European Union are also hot topics.
The finance ministers’ meeting comes a week before a G7 leaders’ summit in Ise-Shima, a region between Tokyo and Osaka. – AFP.
Online Reporter