Major economies should coordinate policy measures

DECISIONS by the US central bank (Fed), the European Central Bank (ECB), and the Bank of Japan infer a currency war unless central banks somehow contrive to find a way out of the blind alley that they have chosen to manoeuvre themselves into.

The US dollar seems bound to strengthen considerably against the Japanese yen (already at a seven-year low against the greenback), less so but up against the euro with China successfully resisting an appreciation of the renminbi. Many emerging market and developing economies (EMDE) currencies are falling vis-à-vis the US dollar, reinforcing its appreciation.

Compounded by a lower oil price, the global economy is clearly out of sync with current account imb…