Fiscal and monetary policies must not be directed at devaluing currencies, the Group of Seven nations said on Tuesday in a statement Japan said gave it a green light to continue efforts to reflate its economy.
The intervention follows a round of rhetoric about a currency war, prompted largely by Japan's new government pressing for an aggressive expansion of monetary policy, which has seen the yen weaken sharply as a result.
The G7 powers—the United States, Britain, France, Germany, Japan, Canada and Italy—reiterated their commitment to market-determined exchange rates and said they would consult closely to avoid disorderly and volatile market moves which could hurt economic and financial stability.
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