Japanese Finance Minister Shunichi Suzuki announced on Saturday that "the G7 finance ministers agreed that the global financial system is robust, but the need for caution still remains." He stated at a press conference that the issue of the U.S. debt ceiling was raised during a working dinner on the global economy, but he declined to disclose what other ministers said about this matter. The ministers concluded a three-day meeting in Niigata, Japan.
Draft: G7 Agrees on Plan to Diversify Supply Chains
A draft statement obtained by Reuters revealed that "the G7 finance ministers of the world's largest economies agreed to launch a plan by the end of this year to diversify global supply chains that will 'contribute to protecting energy security.'" The draft indicated that "the G7 finance ministers also emphasized the need to 'remain vigilant and be light-footed and flexible' in guiding policy amid increased uncertainty regarding global economic forecasts." The draft did not mention the crisis related to the U.S. debt ceiling.
Regarding banking system issues, the draft stated that the financial system is "resilient" due to regulatory reforms implemented after the 2008 global financial crisis. It noted, "We will address the gaps in data, oversight, and regulation in the banking system." It highlighted that "diversifying supply chains can contribute to protecting energy security and help maintain macroeconomic stability," adding that "the seven countries will work with interested nations and relevant international organizations with the aim of launching the plan by the end of this year at the latest."
The G7 finance ministers, who met for three days in Niigata, Japan, will issue the final statement later on Saturday.
Japan: G7 Sees Need to Assess Impact of Previous Interest Rate Hikes
Bank of Japan Governor Kazuo Ueda noted on Saturday that "many central bank governors in the G7 countries seem to feel that the impact of previous interest rate hikes has not fully materialized yet, and they are looking to guide future monetary policy." He spoke at a press conference following the meeting of senior financial officials from the G7 countries held in Japan.
Ueda indicated that he informed his G7 counterparts that the Japanese economy has recovered and that consumer price inflation, currently above three percent, is expected to start slowing in the middle of the current fiscal year ending in March 2024. Ueda and Finance Minister Shunichi Suzuki spoke at the press conference after the G7 senior financial officials' meeting chaired by Japan this year in Niigata, which concluded on Saturday.
