Japan, Germany agree to monitor markets

Agreement comes after jitters stemmed from Western banks

TOKYO:

Japan and Germany agreed on Saturday to coordinate closely on financial jitters stemming from problems among Western banks while carefully monitoring global markets and economy, a Japanese finance ministry official told Reuters.

The agreement came in a 45-minute meeting between Japanese Finance Minister Shunichi Suzuki and German Finance Minister Christian Lindner, visiting Tokyo for bilateral government consultations.

Banking stocks globally have been battered since SVB collapsed raising questions about other weaknesses in the financial system.

The ministers were meeting as German Chancellor Olaf Scholz and Japanese Prime Minister Fumio Kishida kicked off their first government consultation, involving multiple cabinet members from both countries, to discuss ways to secure economic security.

“Risk aversion has been seen in financial markets. We will carefully watch developments and coordinate with the central bank and overseas authorities,” Suzuki told Lindner, according to the Japanese official, adding that, “Japan’s financial system remains stable as a whole.”

Japan succeeded Germany this year as chair of the Group of Seven industrial powers, a group that also includes Britain, Canada, France, Italy and the US.

Suzuki and Lindner agreed to prioritise sanctions against Russia over its invasion of Ukraine and support for Kyiv, while striving to reach agreement on global digital taxation and implement it, as well as steadily resolve developing countries’ debt in line with a Group of 20 framework, the official said.

They also agreed on the need to strengthen supply chains as an element of economic security.

 

Published in The Express Tribune, March 19^th, 2023.

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