The U.S. issued a fresh warning to Japan against competitive currency devaluation on Saturday, exposing a rift on exchange-rate policy that overshadowed a Group of 7 (G-7) finance leaders gathering hosted by the Asian nation.
Japan and the U.S. have been at logger-heads over currency policy, with Washington saying Tokyo had no justification to intervene in the market to stem yen gains, given the currency's moves remained "orderly".
In bilateral talks ahead of the second day of G-7 talks in Sendai, Japan, on Saturday, U.S. Treasury Secretary Jack Lew told Japanese Finance Minister Taro Aso that it was important to refrain from competitive currency devaluations.
"Secretary Lew underscored that the commitments made by the G-20 in Shanghai to use all policy tools to promote growth - fiscal policy, monetary policy and structural reforms - and to refrain from competitive devaluation and communicate closely have helped to contribute to confidence in the global economy in recent months," according to a statement by the Treasury Department.
"He noted the importance of countries continuing to adhere to those commitments," the statement said.