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."