By Akihiro Okada

8:00 JST, October 11, 2025

Forty years after the Plaza Accord, the United States, which once led the creation of postwar international economic rules, has now become a country destabilizing the global economic order through U.S. President Donald Trump’s high tariff policies and other measures.

We have now entered a “G-Zero world,” characterized by a leaderless international system, as if it were guided by a Group of Zero rather than the Group of Seven or Group of 20.

Japan must confront the reality of the global economy, which has undergone a dramatic transformation over the past 40 years, and formulate its future economic policies while drawing lessons from the Plaza Accord.

On Sept. 22, 1985, finance ministers and central bank governors from Japan, the United States, West Germany, France and the United Kingdom — countries collectively known as the Group of Five — gathered at New York’s Plaza Hotel and agreed to correct the strong dollar.

The Plaza Accord did achieve remarkable results in terms of correcting the strong dollar. For example, the exchange rate of ¥240 to the dollar had changed to ¥150 a year later.

However, from the perspective of macroeconomic policy coordination, there were shortcomings.

Toyoo Gyoten, a former vice minister of finance for international affairs at the predecessor of the current Finance Ministry, was involved in the agreement as a bureaucrat. He recalled the time, saying, “We focused on exchange rate issues but did not discuss fiscal or monetary policy matters.”

The Plaza Accord failed in its aim to reduce Japan’s current account surplus through the exchange rate adjustments.

Regarding the limitations of the Plaza Accord, it is beneficial to consider the issue from the perspective of “global imbalances.”

Global imbalances refer to worldwide disparities in current account balances. The current account balance is the sum of the trade balance (comprising exports and imports of goods), the services balance (encompassing transfers of services) and investment income, such as interest and dividends.

The balance between savings and investment in a country is deeply linked to its current account balance. If global economic........

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