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Japan confident of winning G7 concern over strong yen

TOKYO: Finance Minister Kiichi Miyazawa on Friday expressed confidence that Japan's partners in the Group of Seven, G7 meeting here this weekend, would share its concern about the strong yen.

The currency's value against the dollar, which Tokyo fears is hurting Japanese exporters and in turn Japan's economic recovery, is shaping up to be a key bone of contention at Saturday's talks.

The United States wants broader economic issues, such as the need for further reforms in Japan's heavily regulated economy, to be high on the agenda at the talks among G7 finance ministers and central bankers.

But Japan wants the other G7 nations Ñ Britain, Canada, France, Germany Italy and the United States Ñ to reiterate their concern about the yen's strength expressed at the last G7 meeting in September in Washington.

Asked whether he was confident in convincing the other G7 nations of the strong yen's detrimental effects, Myazawa told a news conference: "I am, because it is a fact".

But he added: "Of course, there will be discussion about the yen, a coclusion is unclear until it comes."

Senior officials from the seven countries have agreed in general on the need to prevent the Japanese currency from rising further against the dollar, Japanese press reports said on Friday.

The concern would be noted in the final communique issued after the one-day talks, the Asahi Shimbun said. But the Yomiuri Shimbun said the G7 members were still divided over details of the statement, with Japan wanting an explicit commitment to coordinated action if necessary to curb the yen.

The Japanese unit has come back to 105 yen against the dollar after hitting a high of around 101 at the turn of the year. But it is still 40 percent stronger than 18 months ago, and too high for exporters' comfort.

French Finance Minister Christian Sautter has hinted at his intention of agreeing with Japan over the issue of foreign exchange rates, another Japanese daily said.

"Like Japan, France has a strong interest in cooperation in the foreign exchange market," Sautter told the Nihon Keizai Shimbun in Paris ahead of his departure to Tokyo to attend the G7 meeting.

"Foreign exchange rates will be a very important issue this time as well," Sautter said, amid speculation that the United States will only accede to Japanese concern about the yen if the euro's weakness is also noted.

"We have to strengthen our monitoring in order not to allow foreign exchange rates to part from economic fundamentals," he said.ÑAFP