G-20 likely to weigh aftermaths of Japan's crisis on global economy

TOKYO (Kyodo) - The Group of 20 financial chiefs are likely to discuss the aftermaths of Japan's worst postwar crisis triggered by the March 11 killer earthquake on the global economy at a two-day meeting in Washington starting Thursday.
With radiation spreading from the troubled Fukushima atomic power complex, the focus is on whether Japan can ease concerns among its G-20 counterparts that the deepening nuclear crisis could erode the country's economy, in turn weighing on world economic recovery.
Prior to the G-20 talks, finance ministers and central bank governors from the Group of Seven industrialized nations will also get together to exchange views on ways to tackle the risks of Japan's economic downturn blurring the outlook for the economy across the globe.
The officials from the G-7 -- Britain, Canada, France, Germany, Italy, Japan and the United States -- will gather for the first time since they conducted their first coordinated yen-selling intervention in more than 10 years on March 18 a day after the Japanese currency hit a postwar high of 76.25 against the dollar.
Market participants are paying attention to whether the G-7 financial leaders will indicate the possibility of jointly stepping into the foreign exchange market again if signs emerge that excessive moves in the yen will hurt Japan's economy further.
The G-7 chiefs will analyze the effects of the previous coordinated currency intervention on financial markets at their meeting slated to be held Thursday, Japanese officials said.
From Japan, Finance Minister Yoshihiko Noda and Bank of Japan Governor Masaaki Shirakawa will participate in the conferences.
Noda will offer information to the G-20 nations on the incident at the Fukushima Daiichi nuclear power station as they are increasingly worried about the invisible impact of radiation leaks on their public health and economic circumstances.
''Other countries are very interested in the nuclear plant issue as if it were their own matter,'' Noda said at a press conference Tuesday, adding ''Although not in charge of the (nuclear) matter, I would like to gather all information and explain about the current conditions and restoration work ahead.''
Noda is also expected to explain to his G-20 counterparts about how Tokyo will carry out reconstruction work in disaster-hit northeastern Japan, including its planned first extra budget for fiscal 2011, the size of which could expand to more than 4 trillion yen.
He will show his stance to maintain Japan's fiscal discipline amid expectations the country will be forced to newly issue massive government bonds to finance reconstruction measures, ministry officials say.
Japan's public debt level is approaching 200 percent of gross domestic product, the highest among industrialized countries. Excluding a range of problems stemming from the crisis at the Fukushima power plant, the government has estimated damage from the earthquake and ensuing tsunami, which have left at least around 28,000 people dead or missing, at 16 trillion to 25 trillion yen.
The government has already promised not to sell any new bonds to create the first in a series of extra budgets.
Shirakawa is slated to try to seek an understanding from other central bankers about the BOJ's efforts to prevent financial market turmoil and economic slump. The BOJ last month decided to ease its monetary grip further by expanding its asset buying fund to 40 trillion yen, while pumping a large amount of extra money into financial markets after the devastating quake.
The central bank may pledge at the G-20 and G-7 meetings to support economic reconstruction work from the monetary policy side, people familiar with the BOJ's thinking said.
Since March 11, Japan's economy has been under strong downward pressure as the natural disasters have crippled manufacturing and caused power supply shortages due in part to the accident at the Fukushima atomic power plant.
Radiation leaks from the power station have fanned fears of soil and sea contamination, which could deal a fatal blow to the country's fishery and agricultural industries down the road.
Representing about 80 percent of GDP, the G-20 groups Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United States and the European Union.
At their meeting in Washington, they will also exchange views on the unrest in North Africa, which is related to recent hikes in commodity prices worldwide, while continuing to discuss such issues as the international monetary system and global economic imbalances, which have been blamed for having exacerbated the financial turmoil.