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Japan touts G20 reaffirmation of forex commitments as key achievement

Published 07/26/2024, 06:42 PM
Updated 07/26/2024, 07:52 PM
© Reuters. FILE PHOTO: Japanese Finance Minister Shunichi Suzuki speaks during a meeting with U.S. Treasury Secretary Janet Yellen and Korean Finance Minister Choi Sang-mok on the sidelines of the IMF/G20 meetings, at the U.S. Treasury in Washington, U.S., April 17,
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By Makiko Yamazaki

RIO DE JANEIRO (Reuters) -Japan sees the reaffirmation in the latest G20 joint communique of existing commitments against excessive foreign exchange volatility as one of the major achievements, Finance Minister Shunichi Suzuki said on Friday.

"We believe there were major achievements at G20, such as the inclusion of the reaffirmed foreign exchange commitments in the joint communique," Suzuki said, speaking at a press conference after the Group of Twenty (G20) finance ministers and central bank governors meeting in Rio de Janeiro.

The commitments say the G20 major economies recognize that excessive volatility or disorderly movements in exchange rates can have adverse implications for economic and financial stability.

In the same press conference, Japan's top currency diplomat Masato Kanda said that Japan pushed for the inclusion of the commitments in the communique as their absence "could give a misleading message to the market."

While a weak yen gives exports a boost, it has become a source of concern for policymakers by pushing up the cost of imports and hurting consumption.

The yen rallied sharply this week, rebounding from 38-year lows hit earlier this month, as market participants unwound their long-held bets against the currency ahead of a Bank of Japan (BOJ) meeting next week.

Some politicians have recently called on the BOJ to offer more clarity on its rate hike plan partly to prevent the yen from testing fresh lows against the dollar.

Suzuki said he met with U.S. Treasury Secretary Janet Yellen on the sidelines of the G20 meeting on Friday.

© Reuters. FILE PHOTO: Japanese Finance Minister Shunichi Suzuki speaks during a meeting with U.S. Treasury Secretary Janet Yellen and Korean Finance Minister Choi Sang-mok on the sidelines of the IMF/G20 meetings, at the U.S. Treasury in Washington, U.S., April 17, 2024.  REUTERS/Kevin Lamarque/File Photo

They discussed "wide-ranging topics including Russia, taxation and markets," according to Kanda, who briefed reporters on the bilateral meeting.

Asked if foreign exchange was included in the talks on markets, Kanda confirmed it was on agenda, but noted that it was just an extension of two countries' routine communications and did not mean there were any major issues that needed to be addressed.

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