Nations Want Curb On Soaring Dollar

Seven of the world’s richest countries signaled global currency traders Sunday they would support dumping billions of dollars on exchange markets if the soaring greenback doesn’t eventually stabilize.

After meeting privately at the Treasury Building for about five hours, finance ministers and central bank heads of the United States, Japan, Germany, Britain, France, Canada and Italy issued a statement saying, “We agreed to monitor developments and to cooperate as appropriate in exchange markets.”

This was taken by analysts as a veiled threat from the Group of Seven in support of intervention in currency markets by Japan and the United States, if necessary, by purchasing massive amounts of yen and selling dollars.

But the statement mentioned no specific targets for the dollar-yen exchange rate and the intervention threat was left vague enough that currency traders in Tokyo began testing the G-7’s resolve. The dollar pushed to an early high today of 126.86 yen, up from around 126.25 late Friday in New York.