The United States issued a fresh warning to Japan against intervening in currency markets on Saturday as the two countries' differences over foreign exchange overshadowed a Group of 7 finance leaders' gathering in the Asian nation.
Japan and the United States are at logger-heads over currency policy with Washington saying Tokyo has no justification to intervene in the market to stem yen gains, given the currency's moves remain "orderly".
The rift was on full show at the G7 finance leaders' meeting in Sendai, northeastern Japan, with U.S. Treasury Secretary Jack Lew saying he did not consider current yen moves as "disorderly" after a bilateral meeting with his Japanese counterpart.
"It's important that the G7 has an agreement not only to refrain from competitive devaluations, but to communicate so that we don't surprise each other," Lew told reporters on Saturday. "It's a pretty high bar to have disorderly (currency) conditions.
Japanese Finance Minister Taro Aso said there was no "heated debate" on the yen with Lew, and that it was natural for countries to have differences in how they see exchange-rate moves. But the meeting with Lew did not stop him from issuing verbal warnings to markets against pushing up the yen too much.
"I told (Lew) that recent currency moves were one-sided and speculative," Aso said in a news conference on Saturday, adding that the yen's gains in the past few weeks have been disorderly.
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