Published by Global Banking & Finance Review®
Posted on December 8, 2025
2 min readLast updated: January 20, 2026
Add as preferred source on GoogleThe ECB will follow the G7's exchange rate policy, with Japan's potential intervention in focus. Euro zone economy remains resilient, aiming for a 2% inflation target by 2027.
TOKYO, Dec 4 (Reuters) - The European Central Bank will stick to the G7 communique's language on exchange rates, Piero Cipollone, a member of its executive board, told the Nikkei newspaper when asked whether it would accept any decision by Japan to conduct currency intervention.
"The G7 communique on exchange rates uses very clear language. It says, among other things, that we are committed to 'market-determined exchange rates,' to 'consult closely in regard to actions in foreign exchange markets' and that 'we will not target exchange rates for competitive purposes. We will stick to that," Cipollone said in the interview published on Thursday.
He made the remark when asked whether the ECB would accept Tokyo's intervention in the currency market to prop up the weak yen.
Asked about the euro zone's economy, Cipollone said it had been resilient and the ECB's "central scenario" for inflation, under which it will dip in 2026 and head back to its 2% target by the end of 2027, seemed "more and more credible".
Still, he cautioned the ECB might still need to cut interest rates if its expectations for a boost from German fiscal spending and greater consumption by households fail to come true.
"We are assuming that the savings rate will go down, but this assumption has yet to be tested," Cipollone said. "If it doesn’t materialise, we will need to act."
(Reporting by Leika Kihara and Francesco Canepa; Editing by Himani Sarkar and Tomasz Janowski)
Foreign exchange, or forex, refers to the global marketplace for trading national currencies against one another. It is the largest financial market in the world, influencing global trade and investment.
Monetary policy is the process by which a central bank manages the supply of money and interest rates to achieve specific economic objectives, such as controlling inflation and stabilizing the currency.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured as an annual percentage increase.
Currency intervention occurs when a central bank buys or sells its own currency in the foreign exchange market to influence its value. This is often done to stabilize or increase the competitiveness of a nation's economy.
The European Central Bank (ECB) is the central bank for the eurozone, responsible for monetary policy, maintaining price stability, and overseeing the financial system within the European Union.
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