UPDATE4: BOJ's monetary policy gaining understanding at G-7: Aso.
(EDS: UPDATING WITH END OF 1ST-DAY SESSION, ASO'S REMARKS)
The Bank of Japan's aggressive monetary easing policy is gaining understanding among the Group of Seven industrial economies, Japanese Finance Minister Taro Aso said Friday after the first day of a two-day meeting of G-7 financial chiefs in Britain.
"There were no particular questions raised at the G-7," Aso told reporters when asked about discussions on exchange rates at the meeting.
Noting that the G-7 statement released in February committed members to refrain from competitive currency devaluation, Aso said, "Understanding is spreading that each G-7 country is taking measures for its own economy."
Aso said that George Osborne, Britain's chancellor of the exchequer and chair of the G-7 talks, quoted the February statement when kicking off the first-day discussions in Aylesbury near London.
It remains unknown, however, whether the G-7 finance ministers and central bank governors discussed the steep depreciation of the yen against the U.S. dollar at the G-7 working dinner.
"I do not comment on exchange rates," Aso told reporters.
There was speculation that the rapid pace of the yen's fall on the back of the Bank of Japan's aggressive monetary easing might spark heated debate at the G-7 gathering, with the U.S. dollar surging to 101 yen in Tokyo for the first time in more than four years on Friday.
A Japanese government official also said the G-7 financial chiefs reaffirmed their commitment to their February statement.
Some emerging economies are critical of accommodative monetary policies by major advanced economies such as Japan and the United States out of concern over possible negative spillover effects, including massive fund inflows and formation of asset bubbles.
Asked for his views on the current pace of the yen's depreciation, BOJ Governor Haruhiko Kuroda told reporters ahead of the G-7 meeting that he "would not comment on the level as well as on the exchange rate as it is determined by the market."
He said BOJ policy is aimed at defeating deflation and stabilizing domestic prices and that he will explain this objective to G-7 participants if necessary.
The BOJ chief also brushed aside concerns that excessive depreciation of the yen could negatively impact Japanese small and midsize firms by inflating prices of imported raw materials, saying, "I don't believe any situation requiring concern is developing."
On Japan's economic and monetary policy, a senior U.S. Treasury official told reporters Wednesday in Washington that the United States is "closely monitoring" Japan's efforts to boost domestic demand and looks forward to "further definition of the government's plans to push ahead its ambitious structural reforms."
The financial chiefs from Britain, Canada, France, Germany, Italy, Japan and the United States also discussed the global economy as well as economic developments in their respective countries at the first-day session.
According to the Japanese official, there was a consensus among the G-7 participants that it is important to ensure medium-term fiscal consolidation, while there were discussions on adjusting the pace of fiscal rehabilitation, depending on each economy's conditions.
Aso told reporters that he briefed other G-7 participants about Japan's plan to map out a growth strategy in mid-June as part of the three pillars of Prime Minister Shinzo Abe's "Abenomics" economic policies.
The finance minister also told the G-7 members that Tokyo will draw up a medium-term fiscal consolidation plan some time later, before the Group of 20 Summit to be convened in St. Petersburg in Russia in September.
On Saturday, the finance chiefs are expected to reaffirm the need to implement new capital rules broadly agreed on in 2010 under the so-called Basel III accord as many G-7 members have yet to complete their domestic procedures.
The G-7 financial chiefs are scheduled to conclude the meeting Saturday afternoon.
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|Publication:||Japan Policy & Politics|
|Date:||May 13, 2013|
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