Japan urges forex market to reflect G-20 messages+

GYEONGJU, South Korea, Oct. 23 Kyodo -
Japanese Finance Minister Yoshihiko Noda called on currency market participants
to pay close attention to the agreement reached Saturday by the Group of 20
leading economies, which said they will exercise vigilance against excess
volatility in the market.
Noda, speaking to reporters after the G-20 financial chiefs ended their two-day
meeting in South Korea, also said Japan will continue to take ''decisive
actions,'' including market interventions, to stem the recent strength of the
yen if necessary.
The Japanese currency has reached the strongest level against the U.S. dollar
in over 15 years, adversely impacting Japan's export-oriented economy.
Noda said the strong commitment by the G-20 will help ''stabilize'' the foreign
exchange market, adding, ''The market should think that we reached an
agreement.''
In the communique, the G-20 finance ministers and central bank governors said,
''Advanced economies, including those with reserve currencies, will be vigilant
against excess volatility and disorderly movements in exchange rates.''
Noda said Japan has briefed other countries and won some support of the Tokyo
currency intervention to weaken the yen to the dollar, conducted Sept. 15 for
the first time in more than six years and dumping some 2 trillion yen.
He again stressed the intervention was intended to ease excess volatility
rather than guide the yen to a certain level, suggesting it was different from
interventions some developing countries have conducted constantly to weaken
their currencies as a way to boost exports and employment.
Noda also suggested Japan will refuse to accept any binding numerical goals to
bring current account surpluses and deficits run by the G-20 economies under
certain levels in an attempt to address the imbalance of global economic
growth.
While the United States and South Korea proposed Friday that the G-20 cap the
surpluses and deficits at 4 percent of gross domestic product by 2015, the
group on Saturday said in the joint statement that it will set up
''guidelines'' to assess any large imbalance, refusing to specify any exact
number.
''Current account balances are a result of various economic activities,'' he
said, underscoring that governments cannot control the balances as they can do
over fiscal balances.
He expressed doubt against the idea of setting any strict numerical goals but
said, ''If such a number is only used for reference, then it might be
necessary.''
Bank of Japan Governor Masaaki Shirakawa, who attended the same press
conference after the G-20 meeting in the South Korean city of Gyeongju,
stressed the members confirmed the global economy has been regaining a
foothold, but only in a fragile way.
Countries ''have been increasingly affecting each other at a time of
globalization of the economy and financial system. We need to take into account
how individual countries' policies impact the others,'' Shirakawa said.
==Kyodo