G7 to reaffirm commitment warning against excess FX volatility By Reuters

STRESA, Italy (Reuters) – Finance leaders of the Group of Seven (G7) advanced nations will reaffirm their commitment warning against excessively volatile and disorderly currency moves, according to a draft statement seen by Reuters.

“We reaffirm our May 2017 exchange rate commitments,” the draft statement said, nodding to Japan’s call that the group’s view on the need for currency market stability be reiterated.

The G7 group, currently meeting in Stresa, Italy, has a long-standing agreement that excessive volatility and disorderly currency moves are undesirable, and that countries have authority to take action in the market when exchange rates become too volatile.

Tokyo has argued this agreement gives it freedom to intervene in the currency market to counter excessive yen moves.

Japan’s top currency diplomat Masato Kanda told reporters in Stresa on Friday that he would push for the communique to include language reaffirming the exchange-rate commitment.

In the finance leaders’ communique of May 2017, the group said “excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability”.