Japan Can Do What It Wants According To The G7
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
Now that Currency Wars have been headline fodder for a couple of weeks, it has been necessary for authorities to step and cool that thought. This market has been assured from the highest authority, credible or not, that the ECB sees no risk of a currency war and it must be avoided. Vice-president Constancio reiterated the ECB's position, stating that they respect the "the G7 and G20-nation principles of floating exchanges" and the EUR being a member, its value should be left to the markets. The authorities only concerns rely in the single currency's exchange rate effect on future inflation.
What about Japan's monetary easing efforts? The ECB is relying on the good nature of nations that have signed the G7 and G20 statements not to pursue "unilateral interventions" in the currency markets. Japan knows that any "direct intervention in the foreign exchange market must be coordinated with other major floating currencies.
Japan received a slapping on the wrists from...