The United States warned Japan on Friday to stick to the rules when it came to the value 6:07am EDT of its currency, setting the stage for a potentially uncomfortable meeting of G7 finance ministers outside London. There has been concern among policymakers that Japan is engineering an export-led recovery that could hinder other regions' ability to grow. – Reuters

Dominant Social Theme: The West does not debase.

Free-Market Analysis: So the US is worried about Japanese debasement? This is a little bit like the proverbial pot calling the kettle black.

The US has been printing money heavily some five years ago. Of course, the Federal Reserve was printing money even before then in unprecedented amounts, but the printing presses are running faster than ever these days!

What's good for the US and the West apparently is to be denied to Japan. Here's more from the article:

The Bank of England has recently expanded a credit scheme and finance minister George Osborne has tasked the next central bank governor, Mark Carney, with finding new ways to boost growth when he succeeds Mervyn King in July.

Britain's Osborne, who chairs the talks, is keen for his peers to focus on what more central banks can do to help growth at a time when most governments are trying to cut spending and raise taxes.

"(This is) an opportunity to consider what more monetary activism can do to support the recovery, while ensuring medium-term inflation expectations remain anchored," Osborne said.

Britain's finance ministry said the talks over Friday and Saturday at a 17th-century country house were also likely to focus on bank regulation, tax avoidance and free trade.

The emergency rescue of Cyprus in March acted as a reminder of the need to finish an overhaul of the banking sector, five years after the financial crisis began.

As at last month's International Monetary Fund meeting, Germany may come under renewed pressure to give more support to a banking union in the euro zone. The plan could help strengthen the single currency area, but Berlin worries it may pay too much for future bank bailouts.

We can see quite clearly that the West has no intention of abandoning its considerable monetary stimulation. So this warning to Japan gives rise to a number of questions.

Is Japan acting on its own or in concert with the great powers? And if Japan is somehow acting independently and making a political statement in the process, then it would seem the Land of the Rising Sun may be on the way to creating discomfort among its Western allies.

Japan is a supine, defeated power. Either the stimulation being embarked upon is endorsed or it is not. Presumably we shall know soon enough what the US and Britain are willing to tolerate.

The rhetoric surrounding Japan's monetary gambit will be instructive, no doubt, and further illustrate the reality of the evolving relationship between Japan and the West.

This is one we need to follow.