G-20 reaffirms commitment on orderly currency movements
WASHINGTON (Kyodo) -- Finance chiefs from the Group of 20 major economies on Thursday reaffirmed a G-20 commitment to orderly currency movements as a way to promote world economic growth and ensure stability in financial markets, according to Japanese Finance Minister Taro Aso.
Speaking to reporters after the first day of a two-day meeting in Washington, Aso said it was "significant" that the G-20 underscored the commitment when the world economy is gradually picking up but given growing uncertainties over the outlook such as geopolitical risks over North Korea and Syria.
"It is true that there have been positive views about the world economy, but there are growing uncertainties about the outlook. We sometimes see (disorderly) movements in markets as well," Aso said.
The G-20 "needs to continue coordination in ensuring stability in markets and the economy," he added.
Citing a communique the G-20 finance ministers and central bank governors issued last month in Germany, Aso said he and his G-20 peers reaffirmed that "excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability."
Aso also said the G-20 members reiterated their resolve to "use all policy tools -- monetary, fiscal and structural -- individually and collectively to achieve our goal of strong, sustainable, balanced and inclusive growth."
The G-20 met on the sidelines of semiannual meetings of the World Bank and the International Monetary Fund, at which member states are seeking to affirm support for open trade and global integration in the face of U.S. President Donald Trump's protectionist trade views.
Speaking to reporters ahead of the G-20 meeting, Bank of Japan Governor Haruhiko Kuroda declined comment on Trump's recent claim that the dollar "is getting too strong."
Kuroda said the BOJ's ultraeasy monetary policy is aimed at achieving a 2 percent inflation target, not lowering the value of the yen against the dollar and other currencies.
"The Japanese economy is steadily recovering and on an expansionary trend," he said. "Momentum for a price increase is continuing but not strong enough. The BOJ will firmly continue its monetary easing so as to achieve the 2 percent target as early as possible."
The series of financial meetings in Washington came as uncertainties persist such as heightened tensions over North Korea's aggressive development of nuclear weapons and ballistic missiles and Syria's use of chemical weapons, as well as rising protectionism in some developed countries.
Citing a potential clash between the United States and North Korea and a possible advance by a far-right candidate in the French presidential election which begins Sunday, a senior Japanese Finance Ministry official said he is closely watching such risk factors because they "could have a major impact on financial markets."
Aside from Trump's "America First" mantra, protectionist sentiment appears prevalent in Europe. Marine Le Pen, leader of France's National Front who opposes immigration and pledges to withdraw France from the European Union, is a major contender in the presidential race.
Aso said he told the G-20 meeting that free trade will further bolster the current economic recovery, and that countries should not take action that would run counter to free trade -- a message apparently directed to the Trump administration and some other advanced economies.
Last week, IMF Managing Director Christine Lagarde, a former French finance minister, cautioned of a "sword of protectionism" that she said threatens to put a damper on the global economy's ability to expand.
Other risks to the world economy include faster-than-expected U.S. interest rate increases, which could affect some developing economies by triggering an outflow of capital and investment, as well as China's reliance on excessively rapid credit expansion for growth, according to the IMF.
U.S. and Japanese delegation members said they do not expect the G-20 financial leaders to issue a communique after the meeting, noting that they just did so at their March 17-18 gathering in Baden-Baden, Germany.
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.