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Yen edges up after G7 vows against forex market intervention

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The yen ticked up in thin trading against the dollar and euro Friday after the G7 reaffirmed previous commitments not to intervene in foreign exchange markets.

[TOKYO] The yen ticked up in thin trading against the dollar and euro Friday after the G7 reaffirmed previous commitments not to intervene in foreign exchange markets.

Wrapping up their meeting in rural Japan, the leaders of the Group of Seven agreed to consult closely with each other with regard to actions in currency markets.

"We underscore the importance of all countries refraining from competitive devaluation" of their currencies, the G7 said in a final statement.

"We reiterate that excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability." Tokyo has repeatedly threatened to intervene in forex markets to tame a resurgent yen, which hurts Japanese exporters by making their products more expensive overseas.

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It last intervened in currency markets around November 2011, when it tried to stem the yen's rise against the greenback to keep an economic recovery on track after the quake-tsunami disaster earlier that year.

The commitment by the G7 Friday follows a push on the sidelines of a separate G7 finance ministers' meeting last week from US Treasury Secretary Jacob Lew, who kept up the pressure on Japan not to devalue its currency.

In afternoon trading on Friday, the dollar fell to 109.74 yen from 109.76 yen Thursday in New York.

The euro edged lower to 122.83 yen and US$1.1192 from 122.86 yen and US$1.1194 in US trade.

Analysts said investors refrained from making any big moves ahead of US economic growth data and a speech by Federal Reserve chief Janet Yellen later in the day, which will be scrutinised for clues about the prospects of a possible interest rate hike.

"The dollar rally has stalled," Imre Speizer, a markets strategist at Westpac Banking in Auckland, told Bloomberg News.

"Yellen's conversation will be closely watched, but monetary policy guidance is not assured."

AFP

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