G20 should share view on fast FX moves

The Group of 20 should share a
common view on the need to restrain rapid and extreme currency
moves, Japanese Deputy Chief Cabinet Secretary Tetsuro Fukuyama
said on Wednesday, days ahead of a G20 finance ministers'
meeting.
Strains over exchange rates are expected to dominate a
meeting of G20 finance ministers in South Korea starting on
Friday. Seoul also hosts a G20 leaders summit in November.
"In the competition to weaken currencies, what we need to
watch out for is the tendency for countries to become
protectionist," Fukuyama told Reuters in an interview.
"Without falling into protectionism, we should share the view
that rapid and extreme (currency) moves should be restrained. I
think that the debate at the G20 should start from trying to
share that common view," he said.
"Based on that, we would like to discuss what sort of (new)
framework there should be."
Fukuyama said there was no change in Japan's position on
currency intervention as stated by Prime Minister Naoto Kan, who
has said Tokyo would take decisive moves if needed.
Japan intervened in the foreign exchange market on Sept. 15
to try to curb a rise in the yen that is threatening the
country's economy, but the Japanese currency is still close to a
15-year high below 81 yen.
Tokyo has insisted, however, that its currency intervention
is qualitatively different from that of South Korea, which has
stepped in repeatedly to try to cap a rise in the won.
Fukuyama is one of two politicians holding the post of deputy
chief cabinet secretary under Chief Cabinet Secretary
Yoshito Sengoku, who is the de facto No. 2 in Kan's government.
EXTRA BUDGET, CHINA TIES
Fukuyama also shrugged off concerns that a planned 5.05
trillion yen ($62 billion) extra budget the government wants to
enact to keep the economy afloat will stall in a divided
parliament, where opposition backing is needed to pass bills.
"In the current economic situation … I don't think the
opposition parties will refuse to take part in debate on the
extra budget or act negatively about enacting it," he said.
Japan's government cut its view on the economy on Tuesday,
describing the economic situation as being at a standstill in a
monthly economic report.
Commenting on strained ties with China, Fukuyama stressed
that Asia's top two economies were mutually interdependent and
said it behooved both sides to try to get along and repeated
Tokyo's call for China, now overtaking Japan as the world's
second-biggest economy, to act responsibly as a global power.
"The two governments need to work to create a win-win
relationship," Fukuyama said.
"Of course, China is a major power now and we need to urge it
to fulfil its responsibility as such."
Sino-Japanese ties deteriorated sharply last month after
Japan detained a Chinese trawler captain whose boat collided with
Japanese patrol ships near disputed and uninhabited isles in the
East China Sea, called Senkaku in Japan and Diaoyu in China.
The two governments are trying to arrange a formal meeting
between their leaders at the end of this month on the sidelines
of a regional summit in Vietnam.