JAPANESE Finance Minister Taro Aso said he agreed with his U.S. counterpart Steven Mnuchin on the need to abide by the G7 and G20 agreements on currency policy, including a warning that excess currency volatility is undesirable.

    U.S. President Donald Trump has accused Japan of exploiting a weak yen to give exports an unfair trade advantage, leaving Japanese policymakers worried that Washington may upend a G20 agreement that gives Tokyo room to intervene in the currency market to stem any unwelcome yen spike.

    “We agreed that it was important to maintain the G7 and G20 agreements on currency policy,” Aso told reporters after meeting with Mnuchin on Friday on the sidelines of a Group of 20 finance leaders’ weekend gathering.

    The G20 economies have long agreed on three points on currency policy — to refrain from competitive devaluations, avoid targeting exchange rates for competitive purposes and that “excess volatility and disorderly movements” in currency rates were undesirable.

    In their first face-to-face meeting, Aso said he agreed with Mnuchin on the need to respect all three of that points. They did not discuss recent currency moves or monetary policy, he said.

    The U.S. Treasury Department issued a statement after the meeting only to say Aso and Mnuchin discussed “latest developments in the U.S. and Japanese economies.”

    The two also re-confirmed that currency issues should be left for respective finance leaders to discuss, instead of at a bilaterial economic dialogue kicking off next month, Aso said.

    Japanese premier Shinzo Abe has said he agreed with Trump to allow their finance leaders to debate currency issues, suggesting Washington may soften criticism Japan was manipulating the yen to gain a trade advantage.

    (SD-Agencies)