TOKYO, Feb 8: French Finance Minister Christine Lagarde on Friday welcomed the European Central Bank’s more cautious view of the economic outlook but said the euro was still too high for comfort.

Lagarde was in Japan to meet with her counterparts from the Group of Seven rich nations in the wake of intense market volatility due to the fallout from a slump in the US housing sector.

Lagarde, speaking to AFP after arriving in Tokyo, welcomed Trichet’s statement, saying “it gives a more accurate appraisal of the economic situation as we see it.”

“Considering the different interest rate cuts” in the United States “and what European Union members have said of their respective views on the economic situation in Europe, this is pretty logical,” she said.

“We’ve repeated it for so many times that it’s become convincing,” she said.

“Taking into account the appraisals of the International Monetary Fund, the euro is still at a higher level than it ought to be in theory considering the economies of the European Union,” she said.

A high currency hurts a country’s exporters by making their goods more expensive overseas and reducing their repatriated profits.

This weekend’s meeting of finance ministers and central bank chiefs from the Group of Seven rich nations is set to focus on a global response to the US subprime loan crisis that has battered markets around the world.

The US Congress overnight passed a major stimulus package aimed at reviving the economy. But Washington’s calls for the other G7 nations -- Britain, Canada, France, Germany, Japan and Italy -- to take similar action has met resistance.

But Lagarde was optimistic about reaching an accord with the United States on at least one area -- reforming the role of ratings agencies, which were criticised for not warning about the impending global credit woes.

“The Americans want to avoid regulation every time the practices in place or the rules seem sufficient and by tradition we are more into regulations, but each country wants to reach a common objective by means that seem appropriate,” she said.

—AFP