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G7 Moves to Defuse Currency War Fears

FILE - A man looks at a stock index board outside a brokerage, Tokyo, Japan, June 6, 2012.
The Group of 7 leading industrial nations is trying to ease tensions over how they set the value of their currencies. A statement from top economic officials of the G7 nations says they remain committed to letting market forces set currency values.

The comment follows allegations some countries are cutting the value of their currencies to support their economies by making their exports cheaper on foreign markets. A weak currency could also hurt the economy by sparking inflation.

Economists worry that nations could start competing to have the weakest currency, sparking a cycle of tit-for-tat devaluations that could spiral out of control.

The G7 includes the United States, Britain, Germany, France, Italy, Canada, and Japan.

Japan's economic stimulus efforts have sometimes also reduced the value of the yen. Earlier, Washington complained China artificially held down the value of its currency, hurting U.S. exports and costing American jobs. Brazil has criticized the United States for economic policies, like ultra-low interest rates and increasing the money supply, that weaken the dollar relative to Brazil's currency.

Top officials of the G20 leading economies meet this week in Moscow.

Some information for this report was provided by AP, AFP and Reuters.