UPDATE 1-G20 agrees on need for timely action as global economic risks rise

The Group of 20 industrialized nations agreed on the need to take timely policy action to ensure that heightening risks do not prolong a global economic slowdown, Japan's central bank governor said on Friday. Bank of Japan Governor Haruhiko Kuroda said that while the global economy was likely to rebound in the latter half of this year, the risks of a further downturn were rising due to uncertainty over issues such as the U.S.-China trade dispute.

"There was a shared understanding among the G20 members that each country needs to take timely policy action," Kuroda told a news conference after the end of a two-day meeting of G20 finance leaders and central bank chiefs in Washington. "We need to be mindful of the risks to global growth. G20 countries must ensure they don't take steps that heighten risks, and instead take steps to lessen them," he said.

Japanese Finance Minister Taro Aso also said the balance of risks to the global economic outlook were skewed to the downside due to the possibility of escalating trade tensions and lingering political risks. "We recognize the risk that growth prospects might deteriorate if weakening in key economies feed into each other, given the heightened uncertainties across the global economy," Aso said at the news conference.

Aso added that excessive global imbalances posed risks to the global economy and needed to be addressed multilaterally, rather than on a bilateral basis. As the chair country of this year's G20 gatherings, Japan wants to deepen talks on global imbalances, an effort to divert Washington's attention from bilateral trade imbalances and stave off U.S. pressure to negotiate two-way trade deals.

The G20 countries did not issue a communique after their gathering, which was held on the sidelines of the International Monetary Fund and World Bank spring meetings (Additional reporting by Jason Lange Editing by Paul Simao)