It won’t quite be hand-to-hand combat, but ‘currency wars’ will come to Moscow on Friday as finance officials from the Group of 20 nations spar over Japan’s expansive policies that have driven down the value of the yen.
The G-20 forum, which put together a huge financial backstop to halt a market meltdown in 2009, is back in the spotlight after a week in which the Group of Seven rich nations tried, and spectacularly failed, to speak on currencies with one voice.
The G-7 has long been the powerhouse of financial diplomacy. But tension between Washington and Tokyo has risen over new Prime Minister Shinzo Abe’s bid to end two decades of deflation.
The G-7 issued a joint statementon Tuesday reaffirming “our longstanding commitment to market determined exchange rates”. Yet the show of unity was quickly undermined by off-the-record briefings critical of Japan.
Hosts Russia say the G-20 – which includes leading emerging markets and accounts for 90 percent of the world economy – will back the thrust of the G-7 text when they issue their communique on Saturday. But not necessarily word for word.
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