U.S. Department of the Treasury

As trusted partners, the United States Department of the Treasury and the Japanese Ministry of Finance agreed to continue their close consultations on macroeconomic and foreign exchange matters. They reaffirmed that exchange rates should be market determined and that excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability. They also reconfirmed they have undertaken under the IMF Articles of Agreement to avoid manipulating exchange rates or the international monetary system to prevent effective balance of payments adjustment or to gain an unfair competitive advantage. 

In addition,

• they reconfirmed their recognition of the G7 commitment that fiscal and monetary policies will remain oriented towards meeting respective domestic objectives using domestic instruments and will not target exchange rates for competitive purposes;
• they agreed that any macroprudential or capital flow measures will not target exchange rates for competitive purposes;
• they agreed that other government investment vehicles such as pension funds continue to invest abroad for risk-adjusted return and diversification purposes, not targeting exchange rates for competitive purposes; and
• they concurred that, in cases when intervention in foreign exchange markets may be considered, it should be reserved for combatting excess volatility and disorderly movements in exchange rates, with the expectation that this tool would be considered equally appropriate for addressing excessively volatile or disorderly depreciation or appreciation. 

They also agreed on the importance of transparent exchange rate policies and practices. They commit to public disclosure of:

• any foreign exchange intervention operations on at least a monthly basis; and
• foreign exchange reserves data and forward positions on a monthly basis as well as the currency composition of foreign exchange reserves on an annual basis according to the IMF’s Data Template on International Reserves and Foreign Currency Liquidity.