Washington, Sept 24: The yen's climb against the dollar is likely to be foremost on the minds of economic officials from the world's richest countries when they gather here Saturday. But that doesn't mean they will do anything about it. Finance ministers and central bankers from the Group of Seven major industrialised nations appear unlikely to stage coordinated intervention in foreign-exchange markets to strengthen the dollar against the surging Japanese currency, despite hints that Tokyo would like such joint action to keep the rising yen from choking off Japan's economic recovery.Japan's nascent recovery has attracted investors and driven the yen up more than 15 per cent against the dollar since early July. The yen changed hands at 103.75 yen to the dollar late Thursday in New York. US economic officials, without whose support united action would be less successful, won't say whether they will jump into currency markets. But they persistently imply that it is the Japanese who should take action, not by flooding exchange markets with yen, but by sticking to their government-spending campaign while shifting to a policy of expanding the money supply.
"A continued Japanese commitment to continued stimulus, using all available tools, will be critical until a solid, self-sustaining recovery led by domestic demand is firmly entrenched," treasury secretary Lawrence Summers said at a news briefing Thursday. The G-7 meeting will touch on a variety of issues, including debt relief for poor nations and recent allegations that Russian crooks laundered money through Western banks. The ministers will probably discuss the unsubstantiated allegations that corrupt Russian officials dipped into loans from the International Monetary Fund. But the economic debate will likely centre on Japan and the yen.
-- The Wall Street Journal
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