The Group of Seven (G7) leading economies agreed to hold an emergency phone meeting of finance ministers and central bank governors Monday to discuss the twin debt crises in Europe and the US, probably before Asian markets open, Kyodo news agency reported Sunday. At the meeting, Finance Minister Yoshihiko Noda is expected to pledge that Japan will continue to buy US Treasuries, Kyodo said without citing any sources. The ministers will likely discuss measures to prevent turmoil in financial markets amid US and European debt problems, it said. This developed as the world's leading economies Sunday urgently discussed the stability of financial markets after a historic US credit downgrade rattled investors already worried about European debt crises. The Bank of Korea, South Korea's central bank, said in a statement Sunday that deputy officials from the Group of 20 advanced and emerging economies talked by phone and that G-20 officials plan to continue to strengthen policy coordination to pursue a common response. South Korea is a G-20 member. The statement, issued after a meeting of South Korean finance officials, also said the S&P downgrade had not changed South Korea's confidence regarding US Treasurys. Japan's Senior Vice Finance Minister Fumihiko Igarashi hinted Sunday that Tokyo would intervene again in the currency market if excessive fluctuations continue. It acted Thursday to weaken the yen and protect Japan's recovery from an earthquake and tsunami in March. "It's not over yet. We will act again if we see speculative moves," Igarashi said on a talk show Sunday on public broadcaster NHK, referring to a possibility for more rounds of yen-selling intervention. China, the largest foreign holder of US debt, has yet to comment on the downgrade. However, in an editorial Sunday, the ruling Communist Party's flagship People's Daily newspaper called it a "warning bell" for countries like China whose economies are heavily reliant on exports. "Regardless of whether they are Asian countries that export manufactured goods or Latin America, the Middle East and Russia that rely on exports of natural resources, all now face the threat of seeing their holdings of US debt decline in value and deteriorate in liquidity," the paper said. The countries are concerned Standard & Poor's downgrade of the US credit rating late Friday will shake global markets. In a sign of the fallout, Middle East markets tumbled Sunday on the first day of business after the downgrade. Credit rating agency S&P said it would strip the US of its sterling AAA credit rating for the first time and move it down one notch, to AA+.
