G7 fails to reach agreement on intervention to mitigate rising dollar

Japan, as well as countries facing the consequences of the rapid growth of the US dollar, did not find much consolation in the meetings of world finance representatives held last week. Joint intervention under the 1985 Plaza Accord agreement was not initiated.

Under strong pressure from Japan, the financial leaders of the G7 countries issued a statement on Wednesday. The statement spoke of the G7's intention to closely monitor "recent volatility" in the markets.

However, Japanese Finance Minister Shunichi Suzuki's warning and threat of a new yen-buying intervention failed to prevent the currency from falling to new 32-year lows against the dollar by the end of last week.

Although Japan's finance minister has allies that aren't pleased with the consequences of the US central bank's aggressive interest rate hike, he acknowledged that no plan for coordinated intervention is being developed.

The US Treasury Secretary has made it clear that Washington has no appetite for concerted action. The overall strength of the dollar, according to Janet Yellen, is a natural outcome of monetary tightening in the United States as well as other countries.