“Japan will be reminded of its pledge not to drive down the yen when Group of 20 finance chiefs meet this week for the first time since the world’s third- largest economy intensified its campaign to defeat deflation.
As G-20 finance ministers and central bankers prepare to convene this week in Washington, theU.S. Treasury is saying it will press Japan to refrain from competitive devaluation and European governments are urging it not to become too reliant on fiscal and monetary stimulus.
The yen has fallen against all 16 of its most-traded peers since April 4 when the Bank of Japan (8301) surprised investors by doubling monthly bond purchases and setting a two-year horizon for achieving its goal of 2 percent inflation. The salvo leaves foreign policy makers coupling praise for the effort to boost stagnant economic growth with concern it may come at the expense of their exporters if the yen keeps sliding.
“Yen moves have been too rapid for the U.S. to applaud Japan’s battle to end deflation,” said Yasuhide Yajima, chief economist at NLI Research Institute Ltd. in Tokyo, an affiliate of Nippon Life Insurance Co., Japan’s biggest life insurer. “Japan will have to show fiscal plans and means to strengthen growth to make it clear it’s not depending only on weakening the yen to revive the economy.”
Currency Report
The yen rose against all but one of 16 major counterparts today after a report showed Chinese growth unexpectedly slowed in the first quarter, fueling demand for haven assets. The Japanese currency added 0.2 percent to 98.22 per dollar as of 12 p.m. in Tokyo after earlier touching 97.63, the strongest since April 8…..”
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