Finance Minister Sadakazu Tanigaki said Thursday that Japan will continue to intervene in the foreign-exchange market.
"Sharp fluctuations and volatility are harmful for overcoming deflation, so we will act when such problems arise," Tanigaki said at the Foreign Correspondents' Club of Japan.
Japan is widely believed to have eased its currency market interventions after using more than 35 trillion yen in the past 15 months to weaken the yen against the dollar.
A stronger yen threatens exports, a major force driving Japan's economic recovery, by making them more expensive overseas. It could also threaten efforts to halt falling consumer prices by pushing down prices of imports in Japan.
Tanigaki said Japan's interventions are not aimed at guiding the yen to a specific level.
"I do not have a specific level in mind regarding what would be the tolerance level," he said. "Nor have I talked with the United States and Europe about taking joint action when (the yen) reaches a certain level."
He denied rumors that the recent lull in interventions was due to the upcoming U.S. presidential election in November.
"We do not decide whether to intervene or not after considering what it would mean for the U.S. presidential election," Tanigaki said. "We will intervene when necessary."
Tanigaki said he disagrees with the opinion that Japan should increase the amount of gold holdings in its foreign-exchange reserves.
"In a way, I see the need to diversify in the foreign-exchange reserves," he said. "But in the case of gold, I do not necessarily agree."
Japan's foreign-exchange reserves have swelled due to its yen-selling, dollar-buying interventions. The reserves hit a record high for the seventh straight month in March, rising $49.72 billion to $826.58 billion.