U.S. trade policy and influential American economists are obstacles to creating a system to enforce a trading band for yen-dollar exchange rates, according to Kenichi Ohno, an advocate of such a system.
"Technically, it is easy to stabilize the yen-dollar rate," maintains Ohno, a professor at the National Graduate Institute for Policy Studies in Tokyo and a former International Monetary Fund economist. The problem is a lack of political commitment and a "philosophical" conflict among economists over how foreign exchange should be used, he said.
The need to stabilize foreign exchange rates was agreed on by Asian and European finance ministers at a meeting in Frankfurt, Germany, earlier this month. The topic is expected to dominate the Group of Seven meeting of finance ministers scheduled for Feb. 20 in Bonn and also a June summit in Cologne, Germany.