The Group of Seven finance ministers and central bankers reaffirmed their commitment to market determined exchange rates on Tuesday, in a bid to calm rising fears of a currency war.
"We reaffirm that our fiscal and monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates," the group, representing advanced economies, said in a statement released in London.
"We are agreed that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability."
Concerns are rife that the Japanese government led by Prime Minister Shinzo Abe is targeting a weaker yen in its efforts to end deflation. The Japanese yen has fallen sharply against the dollar in recent months. However, Japan has denied such allegations.
G7 said the advanced nations will continue to consult closely on exchange markets and extend cooperation.
The statement comes just days ahead of the two-day meeting of the Group of 20 nations in Moscow that starts on Friday. The G7 consists of the U.S., the U.K., France, Germany, Italy, Canada and Japan.
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