G7 expresses worries over yen's rise

Oct 27, 2008, 5:50 GMT

   Tokyo - Seven of the world's leading industrialized countries expressed concern Monday over the yen's strength against other major currencies and pledged to cooperate in stabilizing the global financial system.

   'We are concerned about the recent excessive volatility in the exchange rate of the yen and its possible adverse implications for economic and financial stability,' said an emergency statement released by the Group of Seven (G7), which consists of Britain, Canada, France, Germany, Italy, Japan and the United States.

   The statement was released on Japan's request, Japanese Finance Minister Shoichi Nakagawa said after the yen soared to a 13-year high against the dollar.

   The member nations said they had a 'shared interest in a strong and stable international financial system' and promised to 'continue to monitor markets closely and cooperate as appropriate.'

   Japan was expected to take emergency measures to stabilize its currency.

   A high yen hurts manufacturers in export-oriented Japan. It makes their goods more expensive abroad and reduces their overseas earnings. As a result, Japanese firms have cut their earnings projections for this year.

   At midday (0300 GMT) Monday, the US dollar was quoted at 94.02-07 yen, down from Friday's 5 pm quote of 95.14-17 yen, while the euro traded at 118.13-23 yen, down from 120.52-56 yen.