Finance chiefs from the Group of Seven will meet Thursday for three-day talks in Niigata Prefecture, central Japan, as they aim to boost confidence in the banking sector, coordinate more closely in seeking an end to Russia's invasion of Ukraine and tackle risks to global supply chains.
The gathering of the finance ministers and central bank governors comes at a precarious time for the global economy, as a series of U.S. regional bank failures have added to market jitters over aggressive monetary tightening by major central banks and created worries about a recession.
Japan, which holds the rotating G-7 presidency this year, is hoping that the group displays a united front in the face of challenges posed by Russia and China.
In a rare move, non-members Brazil, India, Indonesia, South Korea, Singapore and Comoro, the chair of the African Union, have been invited to join part of the G-7 meeting to discuss global challenges, including debt issues affecting low- and middle-income nations.
The COVID-19 pandemic and Russia's unprovoked invasion of Ukraine have strengthened G-7 unity in recent years.
As the G-7, Britain, Canada, Germany, France, Italy, Japan and the United States plus the European Union are expected to underscore the need to continue depleting Moscow's war chest through sanctions, including a price cap on Russian oil, officials said.
Sergii Marchenko, Ukraine's Finance Minister, is expected to attend a session virtually to demonstrate the G-7's "unwavering" support for the nation.
Following disruptions to global supply chains of critical components like semiconductors, another key G-7 topic is to make them more resilient to future risks, amid building momentum toward decarbonization to tackle climate change with green technology.
The G-7 finance chiefs will also discuss ways to ensure financial stability in the aftermath of the multiple bank failures in the United States that have roiled financial markets.
The widespread use of online banking, as well as the rise of social messaging platforms that have enabled information to spread instantly, are prompting a rethink by financial regulators.
Concerns about a potential U.S. default have left financial markets on edge, with few signs of an end to the recent deadlock over raising the country's debt ceiling. U.S. Treasury Secretary Janet Yellen is among the participants in the G-7 talks.
The finance chiefs' gathering will be among the last ministerial talks arranged in the lead-up to next week's summit in Hiroshima Prefecture, western Japan. A joint statement to wrap up the three days of talks is expected on Saturday.
Finance Minister Shunichi Suzuki and new Bank of Japan Governor Kazuo Ueda will represent Japan, the summit's host.
The G-7 has taken the view that global growth remains resilient, despite increased inflation, and is on guard against developments in the financial markets contributing to an uncertain economic outlook.
Among the G-7 nations' central banks, the BOJ is a dovish outlier, with no immediate tightening of monetary policy in sight under the new governor. The U.S. Federal Reserve and the European Central Bank, among others, have been aggressively raising interest rates to rein in soaring inflation.
