Japanese finance minister in earlier comments from Sendai 21 May 2016
- told Lew that FX stability is important
- no heated debate had with Lew
- told Lew that Japan will proceed with sales tax hike as scheduled
- Sendai meeting has confirmed existing agreements at past G7/G20 meetings on mon pol
- all G7 countries understand that fiscal pol plays a big role in creating demand
- would be natural for ccy to move up or down over a long period of time
- Yen's recent spike by 8-9 yen in 10 days was considered by Japan to be a disorderly move
So does one assume that they wanted to intervene but had their knuckles rapped by G7?
US treasury sec Jack Lew:
- US economy continues to strengthen but global economy remains uneven
- stressed in G7 meetings the importance of reinforcing our exchange rate commitments and to refrain from competitive FX devaluations
- policy makers need to work together to ensure slow global growth does not become entrenched, using tools on mon, fiscal and structural policies
- it has been a pretty high bar to have disorderly exchange rate movements
- it's important that G7 has agreement not only to refrain from competitive devals but to communicate so we don't surprise each other
- BOJ policy was consistent with agreement to use domestic tools for domestic purposes, it's very important this continues to be the case
- G7 didn't have much discussion on US Treasury's ccy report
- Japan has to make its own decision on whether to proceed with sales tax hike but critical consideration should be not to put drag on economy
- it's important that G7 re-iterated its commitment to refrain from exchange rate targeting
Seems like no love lost between Japan and US right now, a theme that Reuters picks up on in a piece here
I have to head away now. Very busy week-end ahead but I just wanted to bring some of the latest G7 headlines to you.
Have a good one everybody, and thanks again for all your support and excellent input.
