Japan did not ask Canada to put Chinese yuan on G-7 agenda: officials

TOKYO, Jan. 21 Kyodo -
The Finance Ministry on Thursday flatly denied overseas media reports that
Finance Minister Naoto Kan had asked Canada to discuss the need for a stronger
Chinese yuan at an upcoming meeting of Group of Seven finance ministers.
Senior officials at the ministry, who spoke on condition of anonymity, said the
reports are unfounded and Japan has not made such a request to Canada, which
will host the meeting.
Kan has never met Canadian Finance Minister Jim Flaherty, the officials said,
adding he has not telephoned or sent a letter to Flaherty regarding issues to
be addressed at the G-7 meeting of finance ministers and central bank governors
in Iqaluit on Feb. 5 to 6.
Later in the day, the ministry hastily organized a press briefing on the matter
after it was instructed by Kan to prevent any misunderstanding regarding
Japan's stance.
The Japanese government will inform financial authorities in Canada and China
that Tokyo has never made such a request, one of the officials said.
According to Reuters, Flaherty said Wednesday that Kan had called for the item
to be on the agenda and that Canada would oblige.
''The new Japanese finance minister has been clear in his wish that...we have
this item on the agenda. So we will have it on the agenda, and we will discuss
it together,'' Reuters quoted Flaherty as telling reporters.
The ministry's quick refutation of the reports signals that the new government
led by the Democratic Party of Japan is being very careful about its relations
with China, which is increasingly becoming a key driving force for Japan's
growth.
Some developed countries have been pressing China to allow the yuan to
appreciate, saying the currency has been kept artificially low to help boost
exports.
As at past G-7 meetings, currency issues, including reform of China's exchange
rate policy, are expected to be among the top agenda items at the forthcoming
talks, according to the officials.
''It's no surprise that the G-7 would discuss currency issues,'' one of the
officials said, ''But that does not mean that Japan is taking the initiative in
setting out the course of the discussion.''
He said recent remarks by Kan to reporters in Tokyo might have been
misinterpreted by the foreign media.
On Jan. 14, Kan told reporters that he would comment ''if necessary'' on
China's currency policy at the meeting if other G-7 countries raise the issue,
as the discussion could have a major impact on Japan's economy.
In their communique issued at the previous G-7 meeting in October, the finance
chiefs of Britain, Canada, France, Germany, Italy, Japan and the United States
repeated their accustomed phrase, ''We welcome China's continued commitment to
move to a more flexible exchange rate.''
At the Iqaluit meeting, they are not expected to release a joint communique for
the first time in more than a decade and will instead focus on a more frank
dialogue on major global economic issues, according to the officials.
Some experts said there could be unnecessary currency speculation if the G-7
countries stop short of providing any information on the results of the
meeting.
Kan, also deputy prime minister, agreed to double as finance minister on Jan. 6
and replaced 77-year-old Hirohisa Fujii, who resigned for health reasons, the
following day.
The Iqaluit meeting will mark Kan's international debut.
==Kyodo