Tuesday, 12 February 2013 20:11
LONDON: The yen hovered near three-year lows against the dollar and the euro rose on Tuesday after the Group of Seven industrialised nations urged countries to refrain from competitive devaluations.
The G7 statement said it remained committed to "market-determined" exchange rates, reacting to weeks of concern that the new government of Japan's monetary easing policy, which has also weakened its currency, could trigger far-reaching currency wars.
"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 said.
The message offered little to suggest that Tokyo is going to come under serious pressure when G20 finance ministers and central bankers meet in Moscow at the end of the week, not least because the United States is employing similar policies.
Japanese Finance Minister Taro Aso welcomed the statement, saying it recognised Tokyo's policy steps were not "aimed at influencing currency markets".
The dollar edged up to 94.21 yen, from around 94.16 yen before the statement was issued and just short of Monday's 94.465 yen, which was the highest since May 2010.
US Treasury official Lael Brainard also said on Monday that while competitive devaluations should be avoided, Washington supported Tokyo's efforts to reinvigorate growth and end deflation.
Copyright Reuters, 2013