G-7 Won’t Target Exchange Rates

Major nations try to ease concerns about a currency war.

The world’s major industrial nations sought to soothe mounting fears of a currency war with a pledge to avoid devaluing their exchange rates in the pursuit of stronger economic growth.

“We reaffirm that our fiscal and monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates,” the Group of Seven’s finance ministers and central bank governors said in a statement released today in London.

Post-Election Push

Driving the yen’s slide is a post-election push by Japanese Prime Minister Shinzo Abe for easier monetary policy to propel the world’s third-largest economy from 15 years of deflation and repeated recessions. That strategy has drawn words of warning from Canada to Germany as policy makers fret Abe is actively trying to weaken the yen, threatening their own exporters.

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