The yen started off on weak footing on Tuesday then later recovered from almost a three-year low against the dollar after comments from the Group of Seven.

G7 said they will not target exchange rates and reiterated their commitment to allow markets to determine currency exchange rates. The statement soothed currency war talk.

Late Monday the yen tumbled after US Treasury Undersecretary Lael Brainard said the US supports Japan's effort to end deflation and boost growth. However she said Japan also needs to stick to commitments on market-determined exchange rates.

The yen initially slumped against the dollar to a low of ¥92.93 but later traded at ¥93.56.

The G7 statement about not targeting exchange rate comes despite concern about the strength of the euro and amidst speculation of a currency war.

G7 pledged to maintain close co-ordination on developments in the currency markets. It is G7 policy to intervene if "excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability".

The euro rose to $1.3449 from $1.3424 on Monday while sterling was hardly changed at $1.5654 from $1.5658.

The dollar index, which measures the dollar against a basket of six major rivals, declined to 80.083 from 80.201 on Monday.




CJ

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