G-7 finance chiefs to meet in Istanbul to give shape to G-20 pledges

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TOKYO, Sept. 30 Kyodo -
Finance chiefs from the Group of Seven industrial powers will gather in
Istanbul, Turkey, on Saturday to reaffirm their determination to revive
economic growth, with Japan's finance minister planning to explain how the
nation's new government plans to handle the economy and fiscal matters.
The half-day meeting of the G-7 finance ministers and central bank governors
will come around a week after the G-7 leaders, together with their counterparts
from emerging economies such as China and India, met for the Group of 20 summit
in Pittsburgh, Pennsylvania.
The financial leaders from Britain, Canada, France, Germany, Italy, Japan and
the United States themselves met in London in early September for a G-20
financial meeting in the run-up to the G-20 summit.
So instead of trying to come up with bold new decisions, the G-7 discussions
are likely to focus on reaffirming pledges made at the G-20 summit and how to
flesh out them, according to Japanese officials.
At the two-day summit of developed and emerging countries through last Friday,
the G-20 leaders agreed to keep global imbalances in check and set up a
framework by November to have member countries periodically monitor each
other's economic programs.
The G-20 also agreed to increase the voting power of developing countries in
the International Monetary Fund by at least 5 percent to give them a greater
say.
At the G-7 meeting, Finance Minister Hirohisa Fujii plans to explain to his
counterparts that the new government led by the Democratic Party of Japan is
changing the nation's economic policy to place more emphasis on boosting
domestic demand, compared with the previous government led by the Liberal
Democratic Party.
''I have to explain that our economic handling will be different from the
previous administration after the government was overturned,'' he told a news
conference Wednesday, adding that the new government also plans to pledge
international economic cooperation.
Japan is currently in the unusual process of screening an extra budget for
fiscal 2009 crafted by the former administration, as the DPJ-led government is
aiming to secure necessary funding for its new stimulus packages, ranging from
child allowances to scrapping expressway tolls.
As for currency matters, Fujii said he is not planning to take up the issue of
the yen's recent appreciation at the weekend meeting.
The yen has risen in recent trading after repeated comments by Fujii taken as
indicating a reluctance to intervene in the currency market to stem the yen's
strength. Fears are rising among Japanese businesses that further appreciation
of the yen would hurt the nation's export-oriented economy.
The minister's remarks last week indicating reservations about currency market
intervention helped push the dollar to a nine-month-low in the lower 88 yen
level in Tokyo on Monday, as some traders took his comments as suggesting
Japan's tolerance of a stronger yen.
Fujii is scheduled to hold a press conference with Bank of Japan Governor
Masaaki Shirakawa after the G-7 meeting and any comments on the currency issue
are likely to draw market attention.
The G-7 gathering will be followed by a series of IMF and World Bank meetings,
including their two-day annual meeting Oct. 6-7 in the Turkish city.
==Kyodo