G7 Issues Statement on Currencies: All Talk, No Action

October 27, 2008

The G7 released a statement on the Japanese Yen this morning, but unfortunately it is all talk and no action which suggests that the Japanese may have had a hard time convincing their US and European counterparts to join in on any physical intervention to sell Yen.

In this type of market environment, open threats accomplish nothing.

Full text of the G7 statement about the JPY:

“We reaffirm our shared interest in a strong and stable international financial system. We are concerned about the recent excessive volatility in the exchange rate of the yen and its possible adverse implications for economic and financial stability. We continue to monitor markets closely, and cooperate as appropriate.”

The Reserve Bank of Australia on the other hand (Australia is not apart of the G7) did intervene in the Australian dollar. They bought the currency for the second day in a row to stem the its slide which has fallen 35 percent in the past 3 months.

Posted in Australian Dollar, Bank of Japan, Fed Rate Cut, Forex News, G7 meeting, US Dollar, US Economy, euro, forex blog