The Group of 7 (G-7) developed nations including the US and Germany vowed to allow foreign exchange markets determine currency values as economies across the globe have been fearing the breakout of a currency war.
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The announcement gave relief to Japan, whose policy makers have borne the brunt of criticism over countries who have devalued their currencies to bolster their economies.
But the Group of 20 (G-20) said the impetus behind the decision was to warn Japan not to use currency values as a tool to alleviate its economic woes.
A more specific statement by the G-7 said they would stay in close consultation with each other to avoid moves that could upset stability. They also restated a commitment to market-determined exchange rates.
Concerns had grown recently about Japan’s weakened currency as a result of its loosened monetary policies.
The US said this week that it supported countries’ efforts to bolster economic growth
but not by means of currency value manipulation.