Finance leaders from the top industrialized nations met in Tokyo and expressed solidarity in the face of an economic slowdown, acknowledging that the situation could worsen due to the weakening U.S. housing market. In a statement released after their meetings, the Group of Seven admitted that economic growth prospects had deteriorated since their last gathering in October, although they believed that the fundamentals were still strong and the U.S. economy would likely avoid a recession. Italian Economy Minister Tommaso Padoa-Schioppa noted that there was a greater sense of pessimism and concern compared to their previous meeting. The finance ministers and central bankers from Japan, the United States, Canada, Britain, Germany, Italy, and France stated that growth in their countries was anticipated to slow to varying degrees in the near future, citing risks from the U.S. property market decline and the resulting tightening of credit conditions which has impeded the flow of money to consumers and businesses that drive the global economy. Debt-ridden banks have reduced their lending due to losses exceeding $100 billion, mainly from failing U.S. home loans. This has led to concerns about a cycle of decreased consumer spending, business contraction, and job cuts. Glenn Maguire, Asia Pacific chief economist at Societe Generale in Hong Kong, observed that the G7 did not provide much detail on coordinated efforts to support the economy. He stated that the economic crisis is primarily caused by U.S. domestic issues and cannot be fixed through global coordination. U.S. Treasury Secretary Henry Paulson warned of potential long-term market instability. Paulson stated that the current financial crisis is severe and ongoing in a prepared statement released after the meeting. He also mentioned that as the financial markets recover from this challenging period, there will be continued volatility as risk is reassessed. The G7 leaders emphasized the importance of banks being transparent about their losses and strengthening their balance sheets to help restore the normal operation of markets. German finance minister Peer Steinbrueck estimated potential writeoffs of up to $400 billion. The leaders pledged to closely monitor developments and take necessary actions, both individually and collectively, to ensure stability and growth in their economies. Promises to collaborate to stabilize the financial system were overshadowed by disagreements on fiscal and monetary policies prior to the G7 meeting. Concerns arose in Europe about the U.S. Federal Reserve's rapid interest rate cuts and fiscal stimulus package, causing tension among allies on how to address the credit crisis. However, tensions eased after the European Central Bank hinted at possibly cutting rates to support economic growth and combat inflation. French Economy Minister Christine Lagarde welcomed this move but expressed a desire for further actions. European leaders were particularly worried about the euro strengthening against the dollar, reaching a record high after the Fed started cutting rates in September. However, the currency lost ground after the ECB changed its stance. Foreign exchange issues were put on hold at Saturday's meeting due to more urgent economic concerns. The communique echoed the October statement, emphasizing the need for China to let its yuan appreciate faster. G7 leaders believe the undervalued yuan gives China an unfair trade advantage and have urged Beijing to increase domestic investment to help rebalance the global economy. The announcement also encouraged oil producers to increase their production following a brief surge in oil prices to over $100 per barrel last month. Although prices have decreased since then, they rose by 4 percent to $91.77 on Friday, marking the largest increase in nearly two months. This increase was influenced by supply issues and the approaching cold weather in the United States.