MNI BRIEF: US, Japan Agree on Close Contact On FX, Policy

Japan’s Ministry of Finance and the U.S. Treasury said Friday they will continue close consultations on macroeconomic and foreign exchange issues, according to a joint statement released by the MOF.

They reaffirmed that exchange rates should be market determined and warned that excess volatility and disorderly moves could threaten economic and financial stability.

The two sides also reconfirmed the G7 pledge that fiscal and monetary policies will be directed at domestic objectives using domestic tools, and not at targeting exchange rates for competitive purposes.

They further agreed that FX intervention should be reserved for addressing excess volatility and disorderly moves, whether depreciation or appreciation, and would be considered equally appropriate in either case.