- repeats its commitment not to weaken currencies for domestic gain
- and re-iterates its commitment to avoid volatility in FX rates
There was never going to be a formal communique as such, and one might rightly question the validity/purpose of this smaller group rather than the more powerful G20, but the general consensus seems to be they accept Japan’s arguments that their dramatic easing on monetary policy is aimed at combatting deflation rather than weaker currency advantage.
This should be the green light for further yen selling when markets re-open given that it takes the uncertainty out of the equation but the announcement was hardly a surprise. It will be interesting to see just how much weaker it gets in the early stages. Failure to drop too far will suggest that there rightly should be an air of caution after such rapid falls.
Interesting also to note though that the US, Canada and Germany went on record to say they were monitoring Japan very closely. Behind the scenes of G7 and G20 I’m sure there is not such a united front as they wish to portray
Goggle the FT’s story ” G7 reaffirms commitment not to depreciate currencies for domestic gain” along with readers comments. The article is gated but you can access with a free registration.
