Yen Gains as G-7 Avoids Talk of Currencies Amid ‘Severe’ Slump
The yen strengthened after finance ministers from the Group of Seven industrialized nations avoided mention of their own currencies, reducing speculation they might back efforts by Japan to weaken its currency, Bloomberg reported.
The dollar rose against the euro and the pound as the G-7 pledged to tackle a "severe" slump that will persist for most of 2009. The pound added to last year's 27 percent slide versus the greenback after Chancellor of the Exchequer Alistair Darling said the U.K. government targets inflation, not exchange rates.
"It was notable that the G-7 described the current situation as a 'severe' downturn," said Danica Hampton, a currency strategist at Bank of New Zealand Ltd. in Wellington. "The gloomy outlook for the global economy combined with limited references to the currencies or to intervention all indicate risk-sensitive currencies will be heavy."
The yen climbed to 91.74 yen as of 6:52 a.m. in Tokyo from 91.93 in New York late on Feb. 13. It advanced to 117.27 per euro from 118.37 in New York and traded at 59.78 yen per Australian dollar.
The U.S. dollar rose to $1.2783 per euro and to $1.4210 per pound. Britain's currency slid 0.4 percent versus the euro to 89.95 pence.
The G-7 repeated its traditional message that "excess volatility" and "disorderly movements" in exchange rates must be avoided. It oversees about two-thirds of the world economy and is composed of the U.S., Japan, Germany, U.K., Italy, Canada and France.