G-7 finance chiefs reaffirm unwavering support for Ukraine

Finance chiefs from the Group of Seven industrialized nations on Sunday reaffirmed their “unwavering” support for Ukraine, Japan’s Finance Minister Shunichi Suzuki said, as Russia’s aggression against its neighbor continues.

The G-7 finance ministers and central bank governors did not discuss recent developments in the foreign exchange market, Suzuki told reporters after their meeting in India, at a time of financial market jitters over future monetary tightening in major economies.

Last week, the G-7 leaders pledged to provide military equipment, training and intelligence, among other forms of support, as Ukraine has begun its counteroffensive against Russia.

The rich club is also committed to giving financial support to Ukraine to help it cope with the impact of the Russian invasion since February 2022.

“We reaffirmed that we will not waver in support of Ukraine,” Suzuki said after chairing the G-7 meeting on the fringes of a financial gathering of the Group of 20 major economies in the western Indian city of Gandhinagar.

Besides Japan, which holds this year’s presidency, the G-7 also involves Britain, Canada, Germany, France, Italy and the United States plus the European Union.

The G-7 finance ministers discussed their coordinated response to Russia and global taxation reforms but not currency moves.

The yen has seen a quick reversal of its recent slide against the U.S. dollar, partly because of slowing inflation in the United States that has prompted market participants to pare back expectations of further aggressive rate hikes by the Federal Reserve.

The Fed and the Bank of Japan are scheduled to hold a policy-setting meeting in late July, respectively, amid speculation that the dovish Japanese central bank may modify its program to keep borrowing costs at rock-bottom levels.

Bank of Japan Governor Kazuo Ueda speaks at a press conference following a meeting of the Group of Seven finance ministers and central bank governors in Gandhinagar, western India, on July 16, 2023. (Kyodo) ==Kyodo

“Yield curve distortions have been rectified,” BOJ Governor Kazuo Ueda told reporters after the G-7 meeting. Uncertainty over the global economy is “high,” he added.

The yield curve control program has been blamed for distorting bond markets as the BOJ has been seeking to keep 10-year Japanese government bond yields within a narrow range.

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