Japan’s finance minister Shunichi Suzuki has urged G7 nations to stay alert to rising currency market volatility, as the yen is under renewed pressure. The aim is to prevent excessive exchange-rate swings and protect global financial stability.
The finance minister of Japan has appealed to fellow G7 nations to stay alert to growing volatility in foreign exchange markets, warning that sharp movements in major currencies could potentially disrupt trade and financial stability around the world. Ahead of this week’s G7 meeting, Finance minister Shunichi Suzuki said Japan was monitoring currency developments with “a strong sense of urgency”, particularly after renewed weakness in the yen. Suzuki has urged closer cooperation among major economies to prevent disorderly exchange-rate movements that could undermine or hinder recovery efforts.
In recent weeks, the yen (JPY) has fallen significantly, touching lows beyond 160 per US dollar (USD), prompting speculation that Tokyo could intervene to steady the market. The yen has since recovered slightly after verbal warnings from officials and stronger-than-anticipated trade data from Japan’s latest economic report.
Suzuki emphasised that stable exchange rates are vital for business confidence and cross-border investment. He said the G7 should maintain close coordination as monetary policies continue to diverge across economies. He stated:
“We will continue to communicate closely with our partners while taking appropriate steps against excessive volatility.”
Yen Faces Pressure as Policy Gap Widens Between Japan and the U.S
The yen’s weakness has largely been driven by diverging monetary policies. The Bank of Japan (BoJ) continues to maintain an ultra-loose stance whereas the U.S Federal Reserve and European Central Bank have already shifted towards easing after years of tightening.
This widening policy gap has fuelled demand for higher-yielding currencies such as the US dollar (USD), keeping downward pressure on the yen (JPY). Analysts say Japan is unlikely to intervene directly unless the decline accelerates or becomes disorderly.
The G7, comprising the United States, United Kingdom, Canada, France, Germany, Italy and Japan, does not usually engage in direct currency management, however members frequently discuss exchange-rate stability during periods of volatility. Perhaps staying united could prevent excessive currency swings which have the potential to threaten the balance of the world economy
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