G-7 presses Japan to do more for crisis-hit Asia
G-7 presses Japan to do more for crisis-hit Asia
LONDON (Reuters): The United States led a Group of Seven
offensive on the Asian economic crisis on Saturday by piling
pressure on Japan to do more to pull its neighbors out of
turmoil.
As finance ministers from the seven leading industrial nations
began two days of talks, the U.S. urged Japan to help revive Asia
by boosting its economy and avoiding excessive weakness of the
yen.
A weak yen would make it harder for other Asian exporters to
compete with Japan.
U.S. Treasury Secretary Robert Rubin met his Japanese
counterpart Hikaru Matsunaga for an hour to discuss a new package
of measures unveiled by Tokyo to spur growth.
"Secretary Rubin expressed his concern that the Japanese
economy is weak and the Japanese external surplus is increasing,"
a U.S. aide told reporters.
"The ministers agreed that both countries will continue to
cooperate to help promote restoration of financial stability and
confidence in Asia."
He said the ministers agreed to work together in foreign
exchange markets to shore up the yen -- just the sort of
cooperative tone that can soothe currency traders and ease
worries of a politically damaging surge in Japan's trade surplus
with the United States.
Indeed the aim of the G-7 was to come up with a harmonious
message for the markets, with all members keen to stem the Asian
flu and make sure turmoil across the Pacific does not turn into a
world recession.
"Restoring stability is important. Avoiding protectionism and
getting growth and employment back in proper perspective is
important," Britain's finance minister, Gordon Brown, told BBC
radio at the outset of the conference.
Brown, playing host to his counterparts from Canada, France,
Germany, Italy, Japan and the U.S., wants the meeting to help
Asia get back on track and explore measures to prevent future
such crises.
He opened the talks by saying ministers planned to submit a
progress report on the lessons to be learnt from the crisis to
the annual G-7 summit in May -- indicating that few concrete
measures were yet on the table.
Investor confidence in Asia's tiger economies crumbled last
summer, sending some of the region's once soaring currencies into
freefall and unleashing social unrest in nations known for law
and order.
Indonesia wrote to the G-7 this week asking for help but it is
far from clear the seven ministers can agree on one sure-fire
approach.
Indonesia's own proposal to peg its currency to the dollar
looked dead in the water and hopes for concerted currency
intervention by the G-7 appeared slim.
" It may come up but we are not going to do it," said a senior
Canadian official on the eve of the talks.
An international monetary source doubted the G-7 could come up
with a united stance on Asia, saying: "We are not at the stage
where we can do something in coordination."