G7 to look at currency strength
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Japanese finance chief Sadakazu Tanigaki says the G7 will not neglect concerns about the dollar's strength.
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TOKYO, Japan (Reuters) -- Japanese Finance Minister Sadakazu Tanigaki says this weekend's Group of Seven (G7) talks will focus on macroeconomic and structural issues but currencies will not be left out.
"Macroeconomy, structural issues -- these will have the most weight in the discussions," Tanigaki told a news conference Tuesday.
"The issue of foreign exchange will not be neglected by the G7," he added.
The dollar fell to its lowest level against the yen in nearly three-and-a-half years on Monday as speculation mounted that Japan's heavy foreign exchange intervention would face criticism at the G7 meeting on Friday and Saturday in Florida.
The dollar was hovering just above 105.50 yen in trading Tuesday, within sight of the multi-year troughs around 105.40 yen set on Monday.
Last Friday, the Ministry of Finance said it had conducted a monthly record of 7.15 trillion yen ($67.8 billion) of intervention in January, on top of an annual record of 20 trillion yen in 2003.
In Washington, a senior U.S. Treasury official said Monday boosting global growth will be the focus of the Florida G7 meeting.
As European officials angled for a common front on currency issues, seeking more stability in currency markets, the U.S served notice it wants progress on faster growth.
Treasury Undersecretary John Taylor said he expected some discussion on currencies but indicated a one-page "agenda for growth" adopted by G7 finance ministers last year will be the centerpiece.
It committed each G7 partner -- the United States, Britain, Canada, France, Germany, Italy and Japan -- to specific initiatives to spur economic activity within their own borders to promote global growth.
European countries complain the communique has become an effective sell-signal for the U.S. dollar, which has sent the euro soaring and hurt the region's exports.
Pressed on Europe's position, Taylor replied: "I'd rather not talk about currencies."
The managing director of the International Monetary Fund, Horst Koehler, weighed in Monday by saying a global economic strategy for calming currency volatility was needed.
Taylor declined comment on Koehler's call but said: "Having higher growth in other parts of the world is important in reducing the U.S. current-account deficit.
"Making other parts of the world more attractive to invest in, like the United States is, would be constructive in dealing with the current account deficit that we have."
Copyright 2004
Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
