Plea to central banks

THE GOVERNOR of the Bank of Japan yesterday called for a better dialogue between central banks and the world's foreign exchange market to allow global economic expansion and promote exchange rate stability.

Yasuo Matsushita said central bankers should help the market understand their policy intentions. He was speaking in the wake of the renewed strength of the yen this year, which has sparked fears of a tough squeeze on the Japanese economy.

Addressing the Association Cambiste Internationale, an umbrella group for the world's currency traders, he said: "Price formation of the US dollar has been influenced by market misinterpretation regarding the [US- Japan] trade dispute and the exchange rate."