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In a joint statement issued following emergency discussions, the G-7 officials said that the United States, Britain, Canada and the European Central Bank will join with Japan in a "concerted intervention" in currency markets Friday. "We express our solidarity with the Japanese people in these difficult times," the statement said. Noda, the finance minister, expressed Japan's gratitude. The yen's rise was driven by expectations that Japanese companies would sell dollar-denominated assets and buy yen to pay for quake recovery. Traders said there was no sign that happened, which meant government intervention might be able to discourage further speculation. Barclays Capital's Yamamoto said the G-7 pledge of cooperation was a striking contrast to last year's talk of possible "currency wars" and governments trying to weaken their currencies to shore up exports amid the global crisis. "It's completely different from last year," he said. "People were talking about currency wars and competitive devaluation. So it's a total change. In that sense, it was very significant that speculative yen appreciation can be attacked by coordinated action." Goldman Sachs estimated Japan's disaster losses could reach $200 billion, the equivalent of more than 3 percent of Japan's annual gross domestic product. It is unclear how much a change in exchange rates might help Japanese exporters, which also are struggling with power shortages that have forced major auto manufacturers and others to suspend production. "Many would currently be unable to benefit from a weaker yen anyway," Capital Economics said in a report. "A stronger currency will at least make imports cheaper and therefore minimize the additional costs of meeting any shortfall in necessities following the disruption to domestic supplies."
[Associated
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