US presses Japan on forex market intervention threat
US Treasury Secretary Jacob Lew kept up the pressure on Japan Saturday not to devalue its currency after repeated threats by Tokyo to intervene in forex markets to tame a resurgent yen.
The warning came in talks on the sidelines of a G7 meeting where Japan's actions have set it on a collision course with its counterparts, including the United States and Germany, which have ruled out such moves.
The topic has been high on the agenda at the two-day meetings in northern Japan and Lew made similar comments on Friday.
In his meeting with Japanese Finance Minister Taro Aso, Lew said that "commitments made by the G-20... to refrain from competitive devaluation and communicate closely have helped to contribute to confidence in the global economy in recent months", the US Treasury Department said.
Aso has repeatedly said he would not hesitate to approve intervention to curb a surge in the yen, and that moves to halt the currency's "speculative" rally would not breach the G20 agreement.
Washington's policy is that the yen's recent strengthening, which has dealt a blow to Japan's exporters as the economy is hit by a slowdown, did not justify a market intervention.
Saturday's meeting comes several weeks after Washington placed Japan on a forex watchlist.
Japan last intervened in currency markets around November 2011, when it tried to stem the yen's rise against the greenback to keep an economic recovery on track after the quake-tsunami disaster earlier that year.
A stronger yen hurts Japanese exporters, a key driver of the world's third largest economy, by making their products relatively more expensive overseas.