G-7 Meetings Provide Arena for Japan and US To Defend Positions On Currency

picture of US Dollars and Japanese Yen
Japanese Finance Minsiter, Taro Aso and US Treasury Secretary, Jacob Lew state its case on devaluation of the Yen.

The first order of business from the G-7 meetings has been concluded and the nations have agreed on policies to fight terrorism by eliminating ways from which terror groups finance themselves. Now the participants can shift the efforts to discuss the issues involving monetary policy.

Japan Wants To Weaken Currency

Japan’s Finance Minister Taro Aso feels that the moves in JPY have been too large during the last few months. He stated that the USDJPY pair has moved in large ranges spanning from five yen to nine yen within a matter of days. Japanese leaders understand the US does not like the weakening Yen and it was natural for the US to claim the moves were “orderly.”  JPY has had a long term move from ¥70 to the dollar to its highs in the ¥120s and closed at ¥110.14.

The US Stays Firm On Currency Claims

US Treasury Secretary Lew claims the recent moves in JPY have been nowhere near “disorderly”. He also stressed that the G7 needs to maintain past agreements that none of the members will initiate a program of exchange rate targeting or competitive devaluation.

All in all both sides are saying what the market expected and the chances of a new round of easing for the yen are high.

 

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