(MENAFN - AFP) The Group of Seven top industrialised nations said on Tuesday that "excessive volatility" in exchange markets undermines stability, in a statement by current G7 president Britain.But the statement stood by foreign exchange rates set by the market, despite objections from France last week to market-driven currency values, against a background of mounting concern about competitive devaluations."We, the G7 ministers and governors, reaffirm our longstanding commitment to market determined exchange rates and to consult closely in regard to actions in foreign exchange markets," they said in a brief collective statement."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."We are agreed that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability. We will continue to consult closely on exchange markets and cooperate as appropriate."Japan's recent monetary easing has stoked fears, especially in Europe, of a so-called "currency war" between the major economies as policymakers seek to devalue their currencies to make exports more competitive.The G7 statement was published ahead of Friday's G20 meeting in Moscow, where exchange rates are expected to figure prominently after Japan took steps to boost its economy and exports.Japan's latest measures pushed the yen lower, making exports cheaper than its competitors, and prompted France to call for a debate and action to make the sure that the eurozone's exports were not put at a disadvantage as a result.But Japanese Finance Minister Taro Aso rejected on Friday criticism that Tokyo was orchestrating a slide in the yen, a day after German leader Angela Merkel voiced concern over the new Japanese government's exchange rate policy."The criticism that (the government) is manipulating the currency rate is completely off the mark," Taro Aso told a regular press briefing in the Japanese capital.French President Francois Hollande has also raised concerns about a recent rise of the euro, which makes exports more expensive.He said last week that the exchange rate of the euro should not be left to short-term market forces, and commenting at a press conference on the G7 statement on Tuesday he said "we must work so that exchange rates are not used for comm erical purposes."Aso's comments were the latest in a simmering row over Japan's currency, with critics saying Tokyo's pressure on the central bank for aggressive policy action amounted to meddling that could spark a global currency war.Overnight, Washington had urged the Group of 20 G20 economic powers, which holds a meeting later this week, to avoid competitive currency devaluation that would threaten global economic growth."To ensure growth strategies in the world's largest economies are mutually compatible and promote global growth, the G20 needs to deliver on the commitment to move to market-determined exchange rates and refrain from competitive devaluation," said Lael Brainard, the Treasury official who will lead the US delegation to the meeting.
