U.S. Markets

Japan, France say sudden forex moves not desirable

France's President Francois Hollande and Japan's Prime Minister Shinzo Abe leave a joint declaration following a meeting at the Elysee Palace in Paris, France, May 2, 2016. REUTERS/Philippe Wojazer

TOKYO (Reuters) - Japanese Prime Minister Shinzo Abe and French President Francois Hollande agreed that sudden moves in foreign exchange rates were undesirable, media reports said, as the yen rose to 18-month highs against the dollar.

The two leaders, after a meeting late on Monday in Paris, also agreed that the Group of Seven (G7) countries should be “flexible” in their fiscal spending policies to deal with increasing uncertainty in the global economy, Jiji and Kyodo agencies reported.

The G7 leaders are due to meet in Ise-Shima, Japan on May 26-27.

The yen rose to 18-month highs against the dollar after the BOJ kept monetary policy steady last week, defying market expectations that it would expand stimulus to protect Japan’s fragile economic recovery.

Reporting by Ritsuko Ando; Editing by Kim Coghill