TOKYO (Reuters) - Japanese Prime Minister Naoto Kan said he will explain Tokyo’s currency market action at the G20 summit if necessary, based on the group’s shared understanding that excessive exchange-rate volatility is undesirable.
Tokyo intervened in the currency market in September to prevent sharp yen gains from hurting the economy and aggravating deflation that has plagued the country for more than a decade. It has not stepped into the market since then.
Kan said Japan’s stance on currencies already gained some understanding from its G20 counterparts when the group’s finance ministers met last month.
“We have basically agreed (at the G20 finance ministers’ meeting) that excessive currency volatility is undesirable. From this standpoint, I will explain thoroughly Japan’s action if necessary,” Kan told reporters in Tokyo before heading for the G20 summit.
Leaders of the G20 club of rich and emerging economies meet in Seoul for a two-day meeting from Thursday, hoping to use the summit to soothe tensions over foreign exchange rates that have been created by sharply divergent economic growth rates.
Reporting by Yuko Yoshikawa and Leika Kihara; Editing by Chris Gallagher