USD will be kept as the key currency

Japan PM says dollar must remain key currency

Japanese Prime Minister Taro Aso said Tuesday that he and US President Barack Obama agreed the dollar must remain the world's key currency despite the US-bred economic crisis. Aso, the first foreign leader to visit the Obama White House, said he and Obama spent roughly half of their one-hour meeting discussing the deepening global economic woes. "In terms of finance, we said it is important to maintain confidence in the dollar as a key currency," Aso told Japanese reporters in Washington after his meeting with Obama. 

"If confidence in the dollar is damaged, it would cause significant effects," he said. Aso said, however, that the US side did not indicate any wish for Japan to increase its purchase of US debts. 

Secretary of State Hillary Clinton on a visit to Beijing last week called on China to continue buying US Treasuries. China last year overtook Japan as the United States' biggest foreign creditor. Japanese officials said that Obama called in the summit with Aso for major economies such as Japan and China to continue efforts to revitalize the international economy. "President Obama said that the United States has been working hard" to boost its economy, said a Japanese diplomat who attended the White House talks. "He then said he wanted other nations of the world to also take action, in particular for major countries such as Japan and China to stimulate their domestic demand," he said. 

Japan, the world's largest economy other than the United States, is suffering a worsening recession due to falling exports and slumping consumer spending. Aso, who is suffering rock-bottom approval ratings, has pushed a plan to give cash handouts to the public in hopes of helping revive the economy. Obama and Aso also agreed to coordinate efforts for the next Group of 20 meeting of developed and developing countries in London, slated for April, the Japanese diplomat said.