Finance ministers from the world's largest economies endorsed Japan's
recently launched easy-money policy Friday, downplaying previous
concerns that the strategy could give Japan an unfair trade advantage.
"We discussed it, but not with the same amount of concern as this past February," Russian finance Minister Anton Siluanov told reporters after chairing a meeting of the Group of 20 finance ministers and central bank governors. "It was discussed in a very calm manner."
The G20 group of countries held a meeting here this week during the spring meeting of the International Monetary Fund and World Bank.
The Bank of Japan is buying massive amounts of government bonds to push down interest rates in an effort to jolt the country out of a 20-year period of deflation and slow economic growth.
The strategy also has lowered the value the yen against other currencies, making Japan's exports less expensive, and thus more attractive. As a result, finance ministers of some advanced economies have said the program could give Japan an unfair leg up in trade.
The U.S. Federal Reserve, which has purchased more than $2.5 trillion in U.S. government bonds the past few years to lower long-term interest rates and spur borrowing, has faced similar criticism.
Finance ministers previously were concerned that the Bank of Japan was selling yen and buying foreign assets, a move that would be more explicitly aimed at affecting currency exchange rates, says economist Michael Gapen of Barclays Capital. It recently became clear that Japan's central bank is buying Japanese government bonds, easing such worries somewhat, he says.
Siluanov said Japan's stimulus is necessary "to realize more favorable rates of economic growth." He said finance ministers and central bank governors are monitoring the program is to ensure it doesn't lead to inflation and higher interest rates, which would compound Japan's debt burden.
In a communiqué after the meeting, the G20 reiterated its previously stated policy of refraining from "competitive devaluation" of currencies. Such tactics could lead to trade wars. G20 officials said countries agreed they "will not target our exchange rate for competitive purposes."
But the statement did not single out Japan. Gapen said the development should settle financial markets and help keep interest rates low in Japan and the U.S..
Separately, Siluanov said G20 participants agreed advanced economies must lower their debt but they did not set specific targets because overly aggressive deficit-cutting could crimp economic growth. In several nations, austerity is already having that effect.
"We all agreed there is no need to set rigid targets," he said. Lowering debt "is really an art."
Siluanov expressed impatience with the slow implementation of new rules designed to give emerging economies more voting power in the International Monetary Fund as their economic clout has increased. Approval of the change has been held up in the U.S. Congress.
It's "taking too long," he said.
The G20 includes finance ministers and central bank governors from 19 countries plus the European Union, which is represented by the President of the European Council and by the head of the European Central Bank. The 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States of America.
"We discussed it, but not with the same amount of concern as this past February," Russian finance Minister Anton Siluanov told reporters after chairing a meeting of the Group of 20 finance ministers and central bank governors. "It was discussed in a very calm manner."
The G20 group of countries held a meeting here this week during the spring meeting of the International Monetary Fund and World Bank.
The Bank of Japan is buying massive amounts of government bonds to push down interest rates in an effort to jolt the country out of a 20-year period of deflation and slow economic growth.
The strategy also has lowered the value the yen against other currencies, making Japan's exports less expensive, and thus more attractive. As a result, finance ministers of some advanced economies have said the program could give Japan an unfair leg up in trade.
The U.S. Federal Reserve, which has purchased more than $2.5 trillion in U.S. government bonds the past few years to lower long-term interest rates and spur borrowing, has faced similar criticism.
Finance ministers previously were concerned that the Bank of Japan was selling yen and buying foreign assets, a move that would be more explicitly aimed at affecting currency exchange rates, says economist Michael Gapen of Barclays Capital. It recently became clear that Japan's central bank is buying Japanese government bonds, easing such worries somewhat, he says.
Siluanov said Japan's stimulus is necessary "to realize more favorable rates of economic growth." He said finance ministers and central bank governors are monitoring the program is to ensure it doesn't lead to inflation and higher interest rates, which would compound Japan's debt burden.
In a communiqué after the meeting, the G20 reiterated its previously stated policy of refraining from "competitive devaluation" of currencies. Such tactics could lead to trade wars. G20 officials said countries agreed they "will not target our exchange rate for competitive purposes."
But the statement did not single out Japan. Gapen said the development should settle financial markets and help keep interest rates low in Japan and the U.S..
Separately, Siluanov said G20 participants agreed advanced economies must lower their debt but they did not set specific targets because overly aggressive deficit-cutting could crimp economic growth. In several nations, austerity is already having that effect.
"We all agreed there is no need to set rigid targets," he said. Lowering debt "is really an art."
Siluanov expressed impatience with the slow implementation of new rules designed to give emerging economies more voting power in the International Monetary Fund as their economic clout has increased. Approval of the change has been held up in the U.S. Congress.
It's "taking too long," he said.
The G20 includes finance ministers and central bank governors from 19 countries plus the European Union, which is represented by the President of the European Council and by the head of the European Central Bank. The 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, the Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States of America.
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