Japan tells Geithner Tokyo supports strong dollar

JAPAN'S finance minister told visiting US Treasury Secretary Timothy Geithner yesterday that Tokyo supported Washington's strong dollar policy, during talks on the global economy.

"A strong dollar policy is correct," Japanese Finance Minister Hirohisa Fujii said he had told Geithner. The current weakness of the greenback reflects US economic conditions, Fujii told reporters.

He also briefed Geithner on plans by Japan's new centre-left government to stimulate domestic demand to boost the export-dependent economy.

US officials ritually express their backing for a "strong dollar" but have done nothing to arrest its slide, which many see as necessary to reduce the big US trade deficit and support struggling American exporters.

The dollar has plunged about 15 per cent against a basket of six other major currencies from a peak earlier this year as investors chase higher yields outside of the US. The dollar's weakness against the yen has taken a heavy toll on Japanese exporters. Geithner arrived in Japan yesterday for a two-day stop on his way to a meeting of finance chiefs from member nations of the Asia-Pacific Economic Cooperation (Apec) forum on Thursday in Singapore.

Fujii, a 77-year-old former bureaucrat who has railed against wasteful public spending and signalled tolerance for a strong yen, was appointed finance minister in September by the new centre-left Prime Minister Yukio Hatoyama.

AFP