Asian inclusion asked in G-7 forex moves

Asian inclusion asked in G-7 forex moves

TOKYO (Reuter): Cooperation on currencies among Group of Seven (G-7) nations is successful and needs to be expanded to include other Asian nations, Eisuke Sakakibara, director-general of the Japanese Ministry of Finance's (MOF) international finance bureau, was quoted as saying.

Activities of Asian nations in financial markets are becoming bigger and more aggressive, and other nations cannot ignore their existence, Sakakibara was quoted as saying by a participant at a seminar he attended over the weekend.

Japan's current account and trade surpluses have been declining and the trend is likely to accelerate because of structural changes in Japan's economy, he was quoted as saying.

The present exchange rate was around 100 yen, but two or three years ago, 130 yen was not an unusual level, he said.

Even if the yen weakened against the dollar due to structural changes in the Japanese economy, people tended to get used to a range once it became established.

A rate of 130 yen to the dollar, for example, would not be surprising if one took such factors into account, Sakakibara was quoted as saying.

Sakakibara is widely seen as the key figure in driving the dollar back above 100 yen last year by hammering out a series of financial market deregulation measures, after which the media dubbed him "Mr Yen".

His comments at a seminar last week that financial markets should not take for granted an imminent rise in Japanese interest rates helped lift the dollar by dampening speculation of a tightening of credit in the near term.