At the time the statement was released, Japan and China were tying their currencies to the dollar at a rate designed to help their export industries. Since this amounts to a fixed-exchange-rate system, were China and Japan in danger from speculative attacks?

I Flexible Versus Fixed Exchange Rates In September 2003, the Wall Street Journal reported that the Group of Seven’s finance ministers and central bank governors released the following statement: “We emphasize that more flexibility in exchange rates is desirable for major countries or economic areas to promote smooth and widespread adjustments in the international financial system, based on market mechanisms.”

At the time, Japan and China were frequently intervening in the currency market to keep their currencies from gaining too much strength against the dollar. These Asian countries preferred to keep their currency weak to promote their export industries.