US tells Japan to stick to currency rules

The United States warned Japan on Friday to stick to the rules when it came to the value of its currency,setting the stage for a potentially uncomfortable meeting of G7 finance ministers outside London.

The United States warned Japan on Friday to stick to the rules when it came to the value of its currency,setting the stage for a potentially uncomfortable meeting of G7 finance ministers outside London.

US treasury secretary Jack Lew said that Japan had growth issues that needed to be dealt with but that its attempts to stimulate its economy needed to stay within the bounds of international agreements to avoid competitive devaluations. Im just going to refer back to the ground rules and the fact that weve made clear that well keep an eye on that, Lew said.

The yen hit a four-year low against the dollar earlier on Friday beyond the psychologically important 100 yen mark. It also trades at a three-year low against the euro.

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The moves were driven in part by news that Japanese investors have been shifting into foreign bonds,a move that has been expected since the Bank of Japan unveiled a massive stimulus plan last month.

Japan insisted that its tumbling yen would not be a hot topic at the meeting of finance chiefs,despite concerns in other camps about a looming currency war.

The Bank of Japan isnt targeting currency rates,which are determined by the markets, the banks governor,Haruhiko Kuroda.

Group of Seven to discuss ways to nurture recovery

LONDON: Financial leaders from the worlds top seven economies are gathering in the UK this weekend to discuss how to shore up the global recovery just as the stimulus policy of one its members,Japan,has caused its currency to extend its slide against the dollar.

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The role of central banks in supporting the global economy is set to be a key point of discussion among officials attending the Group of Seven meeting of finance ministers and central bankers. Ostensibly,the discussions are intended to focus on making sure the global economy gains traction. In recent weeks,markets have calmed down amid signs of improvement in the US economy and a seeming calming in Europes debt crisis. British finance minister George Osborne said the main task officials face over the coming two days at a country house around 50 miles (80 kilometers) northwest of London is how to nurture the recovery.