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LONDON, May 5 (Reuters) - Japanese Prime Minister Shinzo Abe on Thursday expressed Tokyo’s readiness to take “appropriate action” in the currency market to prevent any excessive or speculative rises in the yen.
Abe also said that a summit of the Group of Seven to be held in western Japan later this month would discuss the need to coordinate policy action, particularly through flexible fiscal stimulus, to revive global growth.
“We’ve seen some rapid and speculative moves in currency markets recently ... We will watch currency moves carefully and take action as needed,” Abe told a news conference in London, his latest stopover in a tour of European capitals.
Asked whether currency issues would be discussed at the G7 summit, Abe said: “We expect the issue to be discussed as needed.”
On whether Tokyo is ready to intervene in the currency market, Abe said excessive volatility in the currency market was “undesirable” for Japan’s trade-reliant companies.
He also said Japan never intended to weaken the yen in a permanent manner, dismissing criticism from abroad that it was using ultra-easy monetary policy to depreciate the yen to give its exports a competitive trade advantage.
The yen surged to an 18-month high against the dollar after the Bank of Japan held off from expanding monetary stimulus last week, threatening to derail a fragile recovery for the world’s third-largest economy, which is heavily reliant on exports.
Abe is visiting several European capitals ahead of the May 26-27 G7 summit he will host in Ise, Shima, western Japan, in an attempt to convince leaders of the need to take coordinated fiscal and structural policies to spur stagnant global growth.
But Germany, a staunch opponent of using fiscal stimulus to boost short-term growth, gave Abe only lukewarm support.
“I was able to agree with (European) leaders on the need to use monetary policy, flexible fiscal policy and structural reforms in a balanced manner in accordance with each country’s needs,” Abe said.
“I hope that the G7 leaders come up with a clear message” on ways to boost global growth at the summit, he added.
The G7 groups the United States, Japan, Germany, Britain, France, Italy and Canada. (Reporting by Leika Kihara in Tokyo; Editing by Gareth Jones)