Markets to keep close eye on G-20 currency discussions


Market players will closely monitor discussions on currencies at the upcoming meeting of finance ministries and central bank chiefs of the Group of 20 advanced and emerging economies, Masaaki Kanno, chief economist at JP Morgan Securities Japan Co., said in a recent interview.

A focal point of the meeting, which starts Friday in Moscow, will be “how Japan responds to criticism that its monetary easing is actually yen-weakening policy,” Kanno said.

“In other words, the meeting would be a good opportunity to elaborate on ‘Abenomics,’ ” he said, referring to Prime Minister Shinzo Abe’s economic policy of bold monetary easing and massive fiscal spending aimed at beating deflation.

Kanno pointed out that as long as Japan allows the market to decide exchange rates by itself, “there won’t be any criticism from industrialized countries.”

But he also noted Japan is required to fully explain its fiscal sustainability as a country that has loosened its grip on both credit and government spending despite having the worst fiscal conditions among advanced nations.