No. of Recommendations: 5

Group of 7 Says It Will Let Market Decide Currency Values
New York Times: February 12, 2013

BRUSSELS — Seven major developed countries including the United States and Germany pledged on Tuesday to let foreign exchange markets determine the value of their currencies....

The statement “properly recognizes that steps we are taking to beat deflation are not aimed at influencing currency markets,” said Taro Aso, the Japanese finance minister.

In a statement, the G-7 powers said they would consult closely to avoid moves that could hurt stability. But they restated a commitment to market-determined exchange rates.

“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 G-7 said in the statement, which was posted on the Web site of the Bank of England. ...
[end quote]


If a nation's central bank operates a policy to "meet domestic objectives using domestic instruments" and the currency market responds to that policy, is that the same as targeting exchange rates?

I'm about as convinced that the BOJ is not targeting exchange rates as I am that Japan needs to hunt hundreds of minke whales (which are sold in the fish market) for "research."

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