A bank teller counts 10,000 yen bank notes in Tokyo.
A bank teller counts 10,000 yen bank notes in Tokyo. - 
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STEVE CHIOTAKIS: The yen is off about 4 percent today following an agreement among the G7, the world's top seven economies, to weaken the Japanese currency. The yen had reached record highs in the aftermath of the earthquake and tsunami.

Marketplace's Stephen Beard is with us from London, the world's largest currency market. Hi Stephen.


CHIOTAKIS: This is a pretty unusual move, the G7 hasn't done this in 10 years. Why are they doing it?

BEARD: Well, that's a good question because the rise in the yen itself didn't pose any serious threat to the U.S. or Europe, but it is a problem for Japan. A rising yen makes its all-important exports more expensive. So, the G7 has stepped in to sell the yen, push the currency down again, as an act of solidarity, a mark of sympathy for Japan as Marcus Noland of the Peterson Institute in Washington told the BBC.

MARCUS NOLAND: The Japanese are in trouble. They're going through a very difficult situation and basically this is the other countries around the world saying, "We're with you. We can't do anything to fix your nuclear reactor, but we can make sure that you don't get creamed in the exchange market."

CHIOTAKIS: All right, a mark of sympathy, but is it going to work, Stephen? Will it hold down the yen?

BEARD: Well, these interventions have a patchy record, and certainly when it's one central bank working on its own, it's usually doomed to failure. But this is a coordinated joint action by the most powerful central banks on the planet. The Fed, the ECB and the Bank of Japan. Analysts here are telling me it stands a fairly good chance of success in the short term. And it will take a little bit of the immediate pressure off the Japanese economy.

CHIOTAKIS: Marketplace's Stephen Beard in London. Stephen, thank you.

BEARD: OK Steve.


JEREMY HOBSON: When the Tokyo stock market opened today finance officials from the Group of 7 developed economies -- the G7 -- had an announcement to make. They will intervene to weaken the Japanese yen, which has surged to record levels following the earthquake and tsunami in Japan. The yen promptly dropped 4 percent.

Marketplace's Stephen Beard explains.

STEPHEN BEARD: The Japanese Central Bank began selling yen when their currency markets opened this morning. The European Central Bank did the same at the start of European trading. And the Fed is expected to follow suit. This is the first G7 currencey intervention for more than a decade. It's a mark of internation sympathy for Japan following the Earthquake. The rising yen had threatened to eat into Japanese exports and damage the country's economy even further.

Neil MacKinnon of the VTB Capital Group believes the G7 move will pay off.

NEIL MACKINNON: I dare say that the G7 may have to intervene again just to make the point with the currency markets but, if the G7 gets involved, there will certainly be a much better chance of intervention proving effective.

The yen had been rising since the quake on expectations of a flood of money back into Japan. It's thought that Japanese insurance companies may have to sell their foreign investments and bring the money home to pay the multi-billion yen insurance claims.

In London, this is Stephen Beard for Marketplace.