Days ago, the countries of the G-7 stepped in to rescue the yen from its counter-intuitive appreciation since the great earthquake, tsunami and nuclear crisis struck. According to this editorial from Japan’s Akita Sakigake Shimpo, such prompt action from American, British, Canadian and European central banks was a very positive sign not only for Japan, but for the entire global economy.
The Akita Sakigake Shimpo editorial says in part:
It was a swift response. During an emergency conference call on March 18, the finance ministers and central bankers of the G7 decided to intervene jointly in currency markets. Japanese, American, British and Canadian central banks and the European Central Bank agreed to sell yen reserves.
We won’t know the full extent of the economic devastation for some time. What is certain is that many of the manufacturing centers located on the Pacific coast of northeast Japan were severely hit. A wide range of industries will be affected, from fisheries and agriculture to tourism.
For now, it is important, above all, that the state and people unite to overcome this ordeal. We mustn’t allow the earthquake to hamper the global economy just as it has finally begun to recover from the shock of the financial crisis. It is clear that the shared acknowledgement of this threat brought together the international community to control excessive currency fluctuations. The agreement by the G7 to jointly intervene in the currency markets is a first step toward decisive economic cooperation.
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