G7 plan steps to stem surging yen

The coordinated intervention in international currency markets marked the first by the G 7 countries since the fall of 2000, when the G 7 intervened in an effort to bolster the euro.
G 7 officials said the United States, Britain, Canada and the European Central Bank will join with Japan in a ‘concerted intervention’ in currency markets.

“We express our readiness to provide needed cooperation and our confidence in the resilience of Japanese economy and financial sector,’ G 7 finance officials said in their joint statement. The announcement came following a telephone conference call among finance officials from the G 7 nations.

Japan Finance Minister Yoshihiko Noda said planned intervention was meant to calm ‘volatility’ and G 7 governments were not aiming at a specific exchange rate for the yen.

The yen’s strength in the wake of disaster has been attributed to investors expecting the Japanese to repatriate funds from overseas to pay reconstruction costs — or in the case of insurance companies, to pay claims for massive loss of property and life. G-7 officials said we will monitor exchange markets closely and will cooperate as appropriate.

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