MercoPress. South Atlantic News Agency

Japan insists G-20 must address the issue of capital inflows to emerging economies

Finance minister Yoshihiko Noda

Japan's finance minister made it clear Tuesday that Tokyo is particularly interested in discussing ways to deal with the problem of strong capital inflows into emerging economies when he meets with officials from the Group of 20 industrial and developing nations in Paris later this week.

“What steps can be taken against the issue of capital inflows into emerging countries” is one area of discussion in which “Japan will actively participate,” Yoshihiko Noda said at a news conference after a regular Cabinet meeting.

However Noda stopped short of offering any possible solutions and also said he doesn't expect G-20 debates to focus on “individual policy steps” such as capital controls.

Noda added that he expects G-20 finance ministers and central bank chiefs to have “detailed debates” on indicative guidelines aimed at assessing global imbalances.

Growing capital inflows to emerging economies such as China and Brazil, triggered by lower interest rates in the developed world have triggered inflation in developing nations that are feared could end destabilizing those economies which are currently the global recovery locomotive.

The G-20 financial chiefs will meet in Paris on Friday and Saturday, their first meeting this year under the presidency of France.

The G-20 brings together Argentina, Australia, Brazil, UK, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United States and the European Union.