In an apparent move to step up pressure on Japan, U.S. Treasury Secretary Paul O'Neill warned Wednesday that Tokyo should not resort to a weak yen to revive the long-ailing economy.
He also urged Japan to quickly resolve the banking bad-loan problem and deflation to restore economic growth to 2 percent to 3 percent.
"Exchange rates cannot improve productivity or fix nonperforming loans," O'Neill said at a news conference in Tokyo, expressing concern over the recent sharp depreciation of the yen against the dollar.