G-7 Statements Roil Currency Markets

Conflicting messages on the weakening yen cause Japanese currency to whipsaw.

Group of Seven policy makers roiled the currency markets they sought to calm amid conflicting messages on how much of an economic threat is posed by the weakening yen.

The yen whipsawed as the G-7 appeared at first yesterday to signal joint acceptance of the Japanese currency’s recent drop, only to see its members offer contradictory interpretations of the group’s stance. One G-7 official said there’s concern about excessive moves in the yen, while the U.K. said the group wasn’t singling out an individual country or exchange rate.

Japan’s Take

“Each nation understands that Japan’s policies to tackle deflation are not aimed at influencing foreign exchange rates,” Aso told reporters in Tokyo. “This was discussed by everyone.”

Currency Goals

While Abe and aides have said the yen is only correcting its surge of last year and that their call for more aggressive monetary policy is centered on helping the economy, officials have at times indicated goals for the currency.

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