G7 vows to back stability as nervous markets open

Financial chiefs and central bankers of the G7 nations early Monday pledged to "take all necessary measures to support financial stability and growth" as nervous global markets re-opened. "We are committed to taking coordinated action where needed, to ensuring liquidity, and to supporting financial market functioning, financial stability and economic growth," a statement said as Asian markets reopened lower after a tumultuous weekend. "We are committed to addressing the tensions stemming from the current challenges on our fiscal deficits, debt and growth, and welcome the decisive actions taken in the US and Europe," it said. "The US has adopted reforms that will deliver substantial deficit reduction over the medium term. "In Europe, the Euro area Summit decided on July 21 a comprehensive package to tackle the situation in Greece and other countries facing financial tensions," the statement added. Tokyo stocks were sharply lower in opening trade on Monday despite the Group of Seven financial chiefs and central bankers' pledge to cooperate for market stability. The benchmark Nikkei-225 index of the Tokyo Stock Exchange was down 119.66 points or 1.29 percent at 9,180.22 after the first 10 minutes of trading, having opened 1.40 percent lower. The European Central Bank said Sunday it would make major purchases of eurozone bonds in the latest move to stem a debt crisis that has world leaders scrambling for a global response. The ECB said it would "actively" renew the bond purchases after Italy and Spain announced new measures and reforms to boost their economies and France and Germany pushed for full and rapid implementation of terms agreed at an emergency summit last month. To add to the turmoil, Standard & Poor's cut the US rating to AA+ from the top notch triple-A for the first time. Washington has been split over how to reduce its more than $14 trillion debt without further hobbling the sluggish economic recovery, and its limited debt deal came after a bruising partisan battle.