ID :
169273
Fri, 03/18/2011 - 18:22
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https://oananews.org//node/169273
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G-7 steps into forex markets, shows unity after Japan quake
TOKYO, March 18 Kyodo - The Group of Seven advanced economies showed their unity Friday by jointly intervening in the currency market for the first time in more than 10 years to curb the strength of the yen, amid fears that the damage caused by a massive earthquake in Japan could spread negative fallout through the world.
Finance ministers and central bank governors from the G-7 -- Britain, Canada, France, Germany, Italy, Japan and the United States -- expressed their ''solidarity with the Japanese people'' and pledged ''any needed cooperation.''
The Japanese Finance Ministry and the Bank of Japan apparently sold around 2 trillion yen (about $24.6 billion) for U.S. dollars in Tokyo, according to market participants, while the central banks in Britain, Germany, France and Italy made moves during European trading hours. The U.S. Federal Reserve and the Bank of Canada also announced their interventions.
The agreement on concerted action, announced after their talks by phone early in the morning Japan time, thrust the dollar back to the 81 yen level from the 79 yen range. At 5 p.m. in Tokyo, the dollar traded at 81.69-71 yen, compared with 78.84-94 yen at 5 p.m. Thursday in New York, while the euro fetched 114.77-81 yen against 110.54-64 yen.
Tokyo stocks drew strong buying, with the key Nikkei index advancing 2.7 percent to 9,206.75, as exporters received a boost from a weaker yen.
The G-7 peers of Tokyo ''will join with Japan, on March 18, 2011, in concerted intervention in exchange markets,'' the group said in a joint statement released after the talks. ''As we have long stated, excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability.''
The Japanese currency on Thursday briefly rose to the highest point since the end of World War II at 76.25 against the dollar in Sydney, topping the previous record peak of 79.75 reached in 1995.
The coordinated action by the G-7, which came at the request of the Japanese authorities, was the first since last September, when they collaborated to prevent falls in the euro.
The powerful earthquake with a record magnitude of 9.0 and the ensuing tsunami struck northeastern Japan on March 11, destroying infrastructure, suspending manufacturing and causing serious problems at a nuclear power plant.
''We express our solidarity with the Japanese people in these difficult times,'' the G-7 said and noted ''our readiness to provide any needed cooperation and our confidence in the resilience of the Japanese economy and financial sector.''
The conference was called by Christine Lagarde, finance minister of France, which currently holds the rotating presidency of the G-7.
Japanese Finance Minister Yoshihiko Noda and BOJ Governor Masaaki Shirakawa joined the conference.
''I want to thank them for their friendly cooperation,'' Noda said at a press conference after the talks, expressing his appreciation to other G-7 members. He told reporters earlier that Japan said at the conference that ''despite this difficult situation, Japanese society remains in order and calm, and that the Japanese economy remains sound.''
A stronger yen is feared to negatively affect the Japanese economy as exporters lose their competitiveness, while many firms feel downward pressure on their earnings when profits from their overseas arms are repatriated.
Shirakawa said, ''The BOJ will press for strong monetary easing and provide sufficient funds (to the banking system) in order to secure stability in financial markets.''
The Japanese central bank continued its fund-providing operation, injecting an additional 4 trillion yen into the Tokyo money market after the G-7 talks. The move, designed to help lenders in quake-hit areas raise necessary funds, came for the fifth consecutive day, bringing the total amount of liquidity provided in the emergency operation to 38 trillion yen.
The BOJ fears any rapid rise in interest rates in money markets, where banks and other financial institutions borrow short-term money from each other.
Kaoru Yosano, Japan's economic and fiscal policy minister, said, ''The G-7 shares the view that it is inappropriate that we see excess speculative moves at this unfortunate moment'' caused by the earthquake.
Yosano criticized market players for fueling speculation and triggering the yen's appreciation on rumors that Japanese insurance companies are repatriating funds from abroad to brace themselves for a rise in insurance claims after the deadly quake. The government has denied such developments in the insurance sector.
==Kyodo
2011-03-19 00:17:56
Finance ministers and central bank governors from the G-7 -- Britain, Canada, France, Germany, Italy, Japan and the United States -- expressed their ''solidarity with the Japanese people'' and pledged ''any needed cooperation.''
The Japanese Finance Ministry and the Bank of Japan apparently sold around 2 trillion yen (about $24.6 billion) for U.S. dollars in Tokyo, according to market participants, while the central banks in Britain, Germany, France and Italy made moves during European trading hours. The U.S. Federal Reserve and the Bank of Canada also announced their interventions.
The agreement on concerted action, announced after their talks by phone early in the morning Japan time, thrust the dollar back to the 81 yen level from the 79 yen range. At 5 p.m. in Tokyo, the dollar traded at 81.69-71 yen, compared with 78.84-94 yen at 5 p.m. Thursday in New York, while the euro fetched 114.77-81 yen against 110.54-64 yen.
Tokyo stocks drew strong buying, with the key Nikkei index advancing 2.7 percent to 9,206.75, as exporters received a boost from a weaker yen.
The G-7 peers of Tokyo ''will join with Japan, on March 18, 2011, in concerted intervention in exchange markets,'' the group said in a joint statement released after the talks. ''As we have long stated, excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability.''
The Japanese currency on Thursday briefly rose to the highest point since the end of World War II at 76.25 against the dollar in Sydney, topping the previous record peak of 79.75 reached in 1995.
The coordinated action by the G-7, which came at the request of the Japanese authorities, was the first since last September, when they collaborated to prevent falls in the euro.
The powerful earthquake with a record magnitude of 9.0 and the ensuing tsunami struck northeastern Japan on March 11, destroying infrastructure, suspending manufacturing and causing serious problems at a nuclear power plant.
''We express our solidarity with the Japanese people in these difficult times,'' the G-7 said and noted ''our readiness to provide any needed cooperation and our confidence in the resilience of the Japanese economy and financial sector.''
The conference was called by Christine Lagarde, finance minister of France, which currently holds the rotating presidency of the G-7.
Japanese Finance Minister Yoshihiko Noda and BOJ Governor Masaaki Shirakawa joined the conference.
''I want to thank them for their friendly cooperation,'' Noda said at a press conference after the talks, expressing his appreciation to other G-7 members. He told reporters earlier that Japan said at the conference that ''despite this difficult situation, Japanese society remains in order and calm, and that the Japanese economy remains sound.''
A stronger yen is feared to negatively affect the Japanese economy as exporters lose their competitiveness, while many firms feel downward pressure on their earnings when profits from their overseas arms are repatriated.
Shirakawa said, ''The BOJ will press for strong monetary easing and provide sufficient funds (to the banking system) in order to secure stability in financial markets.''
The Japanese central bank continued its fund-providing operation, injecting an additional 4 trillion yen into the Tokyo money market after the G-7 talks. The move, designed to help lenders in quake-hit areas raise necessary funds, came for the fifth consecutive day, bringing the total amount of liquidity provided in the emergency operation to 38 trillion yen.
The BOJ fears any rapid rise in interest rates in money markets, where banks and other financial institutions borrow short-term money from each other.
Kaoru Yosano, Japan's economic and fiscal policy minister, said, ''The G-7 shares the view that it is inappropriate that we see excess speculative moves at this unfortunate moment'' caused by the earthquake.
Yosano criticized market players for fueling speculation and triggering the yen's appreciation on rumors that Japanese insurance companies are repatriating funds from abroad to brace themselves for a rise in insurance claims after the deadly quake. The government has denied such developments in the insurance sector.
==Kyodo
2011-03-19 00:17:56
