AYLESBURY, England - The United States told Japan it would be watching for any sign it was manipulating its currency lower but Tokyo said it met no resistance to its policies at a meeting of Group of Seven finance ministers which will conclude on Saturday.
As ministers and central bankers met in a stately home set in rolling countryside 40 miles outside London, differences were also evident over whether to prioritize debt-cutting or promoting economic growth.
Treasury Secretary Jack Lew said Japan had "growth issues" that needed to be dealt with but that its attempts to stimulate its economy needed to stay within the bounds of international agreements to avoid competitive devaluations.
"I'm just going to refer back to the ground rules and the fact that we've made clear that we'll keep an eye on that," Lew told the CNBC news channel.
The yen hit a four-year low against the dollar on Friday, beyond the psychologically important 100 yen mark. It also trades at a three-year low against the euro.
The moves were driven in part by Japanese investors shifting into foreign bonds, a move that had been expected since the Bank of Japan unveiled a massive stimulus plan.
Tokyo insisted its tumbling yen was not a hot topic at the meeting of finance chiefs, despite rhetoric about a currency war.
"Japan took bold monetary and fiscal action to end prolonged deflation, with the government and the Bank of Japan working closely together," Japanese Finance Minister Taro Aso told reporters after hours of talks with fellow G7 ministers and central bankers.
"The G7 didn't have a particular problem ... I think Japan's stance is gaining broader understanding," he said.
Policymakers are concerned Japan is engineering an export-led recovery that could hinder other regions' ability to grow.