Japan wants support for currency stability

Japan will use the meeting Feb. 1 of Group of Seven finance ministers and central bankers to advocate that proper action be taken against excessive moves in the foreign exchange market.

When asked Feb. 3 about Japan’s stance on the issue at the G-7 meeting to be held in Berlin, Vice Finance Minister Tadashi Ogawa told a news conference that the government believes stability is very important. With the yen’s rapid fall against the dollar in recent weeks, some Japanese officials have hinted that the foreign exchange issue will be brought up at the G-7 meeting in Berlin in the hope that a consensus can be reached to stabilize the Japanese currency.

Since its meeting in April 1995, the G-7 has agreed to favor a strong dollar. It has continued to affirm this position at subsequent meetings. However, the yen hit a four-year low against the greenback in Tokyo trading last week as the dollar strengthened against other major currencies as well. Dollars were bought because market players doubted monetary authorities would intervene in concert, as the U.S. maintained that a strong dollar was in its national interests and while European nations said they were willing to accept a strong greenback.

But comments by some German authorities last week indicated they also believe the dollar need not grow any stronger, leading some observers to believe Japan may urge its G-7 partners to agree to call for stable exchange rates.

Foreign reserves fall