Photo: Wikimedia Commons
The G7 has issued a statement about everyone’s favourite topic these days, currency weakening, or as some have called it, the “currency war.”Via the Bank of England, it’s a very weak statement that has no big implications at all. Basically, they’re against currency manipulation and in favour of market-set exchange rates.
“We, the G7 Ministers and Governors, reaffirm our longstanding commitment to market determined exchange rates and to consult closely in regard to actions in foreign exchange markets. We reaffirm that our fiscal and monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates. We are agreed that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability. We will continue to consult closely on exchange markets and cooperate as appropriate.”
If anything, the weakness of the language is seen as a sign that Japan isn’t being condemned for its policy that has weakened the yen. Green light. Yen down a little bit post statement.