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'Nixon shock' still haunts Japan: ex-financial diplomat Gyoten

Yuan unlikely to replace dollar as key international currency

Toyoo Gyoten, a former Japanese Vice Minister of Finance for International Affairs, predicts that the dollar will remain the world's main reserve currency for the foreseeable future.

TOKYO -- When U.S. President Richard Nixon decided in the summer of 1971 to suspend the dollar's convertibility into gold, the postwar system of fixed exchange rates that pegged the yen at 360 to the greenback collapsed, throwing the Japanese economy into turmoil.

Toyoo Gyoten, honorary adviser to the Institute for International Monetary Affairs, a Tokyo-based think tank, and a former Japanese Vice Minister of Finance for International Affairs, discussed the legacy of the "Nixon shock" in an interview with Nikkei. Gyoten, who also worked at the International Monetary Fund and the Asian Development Bank, is one of Japan's foremost experts in postwar "foreign exchange diplomacy."

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