Comments from finance ministers and central bankers at G7 meeting
(JP) Japan Fin Min Aso (G7 host): G7 reaffirms the importance of FX stability
- reiterates Japan has committed to avoiding competitive currency devaluations
- Japan govt considers the recent spike in Yen as a disorderly move; its natural for currencies to fluctuate over a longer period of time
- Japan sales tax hike is still proceeding on schedule
(JP) BOJ Gov Kuroda: G7 meeting affirms agreements from past meetings on monetary policy
(FR) France Fin Min Sapin: monetary policy is well adapted to the current economic environment; there's no need for to intervene in FX market
- no need for a big fiscal stimulus right now like the one after the 2008 crisis
- G7 discussed Germany as it has the most space to take budgetary measures, believe Germany should take policy action to support growth
- G7 agreed a Brexit would hurt the UK and euro zone economies; did not discuss a 'Plan B' to respond to market turmoil if the UK votes in favor of Brexit
- no discussion of Japan FX policy
- G7 leaders summit next week will announce specific measures against terrorist financing
(FR) Bank of France Gov Villeroy: negative interest rates is only one part of monetary policy, but it is helpful tool for inflation
(DE) German Fin Min Schaeuble: G7 has not made any big decisions at this meeting
- agreed the economy is better than some of us believed
- large volatility in financial markets is a risk for the global economy
- optimistic that Greece problems can be solved but not necessarily at the Eurogroup this week; have to differences with IMF's Lagarde regarding Greece
(DE) Bundesbank Gov Weidman: German growth to decline in the next month from the high level in Q1
- there is not much fiscal space to act in many countries
- exchange rates cannot become instruments of active monetary policy, it would lead to competitive devaluation
(US) Treasury Sec Lew: US economy continues to strengthen but the global economy remains uneven
- reminded G7 of the importance of our exchange rate commitments and avoiding competitive devaluations; G7 need to communicate so we don't surprise each other
- did not have any detailed talks about the Treasury's new "monitoring list" on FX policy
- reiterates BOJ continues to use policy as a tool for domestic purposes, consistent with G7 agreements
- it is critical that any sales tax hike in Japan does not create a drag on growth; Japan must make its own judgment
- fiscal and monetary policymakers should work together to prevent slow global growth from becoming entrenched