Australia indicated support on Friday for Japan’s monetary policy saying that as long as it was pro-growth it was appropriate, despite concerns by some that it was weakening the yen.
“Insofar as they are deploying fiscal and monetary policy to try to drive stronger economic growth, everybody’s got a stake in that,” Treasurer Wayne Swan told reporters ahead of a meeting of finance ministers and central bankers of the Group of 20.
The minister said it was up to Japan to characterize its initiatives, but said that it was the monetary policy of the European Central Bank and the U.S. Federal Reserve that was responsible for improved confidence in the last four to five months, demonstrating the need for active monetary policy.
“The actions taken by (ECB President Mario) Draghi in Europe and the actions taken by (Fed chairman Ben) Bernanke in the U.S. have been fundamental in getting a greater degree of confidence in the global economy in recent months,” Swan said.
He said that if developing countries were concerned about spillovers from such policies, there are means such as capital controls that are available under frameworks established by the International Monetary Fund.