By Toni Vorobyova
LONDON (Reuters) - The Group of Seven's call on markets to consider Japan's strengthening economy and be wary of one-way bets in foreign exchange is unlikely to put investors off selling the yen anew.
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By Toni Vorobyova
LONDON (Reuters) - The Group of Seven's call on markets to consider Japan's strengthening economy and be wary of one-way bets in foreign exchange is unlikely to put investors off selling the yen anew.
Finance ministers and central bankers from the G7 industrialized powers said over the weekend that ""Japan's recovery is on track"" and expressed confidence that ""the implications of these developments will be recognized by market participants.""
European Central Bank President Jean-Claude Trichet went further, saying: ""We want the markets to be aware of the risks of one-way bets, in particular on the foreign exchange market.""
Japanese Finance Minister Koji Omi made similar comments.
But analysts said that what actually came out of the meeting is unlikely to be strong enough to give the yen any more than a short-term boost when the markets open on Monday.
""They didn't actually mention carry trades specifically in the communiqué but I think this is the first step in starting to warn markets of the risk. But they don't want to be responsible for bursting the bubbles themselves,"" said Ian Stannard, senior foreign exchange strategist at BNP Paribas.
""It may cause the yen to gain a little bit of ground but it is probably not enough to kick start any sustained turnaround in the yen at this stage,"" he added. Continued...
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