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| G7 countries agree on intervention to control yen rise | G7 countries agree on intervention to control yen rise |
| (40 minutes later) | |
| Finance ministers from the G7 group of the world's richest nations have agreed to step into currency markets in an effort to control volatility in Japan's yen. | Finance ministers from the G7 group of the world's richest nations have agreed to step into currency markets in an effort to control volatility in Japan's yen. |
| It is first time since 2000 that G7 countries have jointly intervened in currency markets. | It is first time since 2000 that G7 countries have jointly intervened in currency markets. |
| Earlier this week, the yen hit its highest level since the Second World War against the US dollar. | Earlier this week, the yen hit its highest level since the Second World War against the US dollar. |
| There are fears a strong yen will hamper Japan's recovery. | There are fears a strong yen will hamper Japan's recovery. |
| In Asia on Friday the yen weakened to 81.21 against the US dollar after news of the intervention plans. | |
| The G7 said that the member nations would "join Japan, on March 18, 2011, in concerted intervention in exchange markets". | The G7 said that the member nations would "join Japan, on March 18, 2011, in concerted intervention in exchange markets". |
| "As we have long stated, excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability," the G7 said in their statement. | "As we have long stated, excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability," the G7 said in their statement. |
| "We will monitor exchange markets closely and co-operate as appropriate." | |
| The G7 comprises the US, Japan, Germany, France, the UK, Italy and Canada. | |
| 'Slow things down' | |
| The first intervention by the G7 nations comes after volatility in markets in the aftermath of the devastating earthquake and tsunami in Japan. | |
| Japan's main Nikkei 225 index lost more than 16% on first two days of the week before recovering on Wednesday. | |
| But just as the stocks were recovering, the yen hit its record-high sending them into a tumble once again. | |
| Investors were concerned a stronger yen will hit profits at some of Japan's biggest companies. | |
| Analysts say the G7 decision is likely to soothe nerves. | |
| "There are three reasons that are going to make it effective: This is a joint market action, it is conspicuous in its timing and it is across currencies," said David Forrester of Barclays Capital. | |
| However, he added that while the intervention will calm the markets, it may not have a drastic impact on the yen's value. | |
| "The move down in dollar/yen was quite sharp and, historically, intervention is designed to slow things down rather than mark a turning point," Mr Forrester said. |