September 23, 2017
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G7 Japan: Talk, But Little Action?

G7 finance ministers and central bankers are meeting in Japan. As David Pollard reports, macroeconomic policy, structural reform and tax evasion are on the agenda as numerous uncertainties shake the global economy.

20,000 people lost their lives when an earthquake and tsunami hit Japan's north-east coast five years ago.

That, and an economy was knocked off balance too.

This new meeting of G7 ministers, then, could be about reconstruction.

But also dialogue.

Central Bank of Japan Governor, Haruhiko Kuroda says "We, the G7 countries, are presently faced with many challenges that need to be addressed on the global economic front."

But where there might be candour, there might also be division.

G7 members seemingly at odds on many of the big themes.

And dogged by a poor track record of turning talk into decision.

Chief investment officer, CCLA Investment Management, James Bevan said "Very clearly Japan would like to have some confirmation that devaluing a currency to engineer growth is acceptable, but of course that's not going to down very well with the US. There's likely to be some talk about the appetite for a new fiscal policy but of course Germany is extremely unkeen to loosen the purse strings. And then there is the whole question of central banking policy, and there I think there will be much, much talk, but remarkably little agreement.

And while the strength of Japan's GDP figures this week surprised many, the host nation is still seen with mountainous tasks ahead to spur growth.

A Reuters poll showing 4 out of 5 economists expect more monetary easing in July.

But the urgency for global action could be less acute.

CITI European Economist, Christian Schulz, saying "Some of the maybe worst-case scenarios for global growth that we have at the beginning of the year have faded so there's a bit more confidence that things won't get as bad and that reduces the pressure on the G7 or any of these groupings to come up with a coordinated monetary or especially fiscal response."

That at least one reason to smile for the cameras.

(Reuters)