G7 meeting ends with divided views between the finance ministers. The finance chefs of G7 seem to be divided in their approach towards the forex market and how the conditions need to be regulated. G7 represents the Group of Seven whose finance chiefs have differing views on foreign exchange rate and the steps they need to take to boost the spending for public market conditions. The two day meeting was held in Sendai, northeast Japan this Saturday.
US and Japan have been two countries who are trying to see eye to eye in case of foreign exchange market policies. Japan would like to continue easing the monetary pressure in order to keep up the competitiveness of its traded products in the global market. With the Japanese yen appreciating into the forex market, they are seeing it as an urgent need. On the other hand, US Federal Reserve does not want to pursue loosening its grip over the dollar and yen interactions. In the G7 meeting Japan stated that it wants to boost spending for public initiatives which will drive up global economy but Germany also did not favor this suggestion. For more information on Forex Trading Easier Go Here.
Reports are coming in that the finance chiefs being divided on the global stance that is necessary has led to an inconclusive summit of the G7 leaders. There might not be anything definite that might emerge from the results of the meeting. In the meeting the ministers talked about
- Deploying an action plan which will block funding to different terrorist groups. This will be achieved by sharing information as well as enforcing strict rules when it comes to transactions in finances.
- Most of the central bankers remained united in their thoughts towards terrorism as well as the refugee crisis that exists in EY.
- With Britain set to exit from being part of the EU there are certain risks being contemplated in the global economy.
On the issue of Japan and Us forex markets, intervention remains a threat from Japan, which US does not want to consider. US secretary kept up the pressure even at the G7 meeting even when Tokyo has been issuing repeated threats that they will devalue the currency in order to bring in competitiveness for their yen. Even though the recent rise of yen’s value in forex markets has been difficult for the exporters, US authorities do not feel that it justifies that the finance minister intervenes in the market. Japan has taken a stance that it should intervene, which was discussed at G7 meeting and was opposed by Germany and US. The topic remained high on the priority list in the two day meeting that took place in northern Japan.
The main points of contention that arose from the meeting were that finance minister of Japan felt that an intervention is necessary and it would not go against the norms set for G20 countries. On the other hand US feel that the competitiveness of the market should be allowed and yen strengthening is a sign of an economic slowdown and should not be corrected by intervention.