Finance Minister Sadakazu Tanigaki said Tuesday that worries raised by European financial chiefs Monday about the dollar's rapid fall against the euro are "understandable."
He made the remark after European Union finance ministers, the European Commission and the European Central Bank called Monday for global action to stabilize the currency markets, saying recent exchange-rate swings involving the dollar are unwelcome.
In their joint statement released after the one-day talks, they asked nations to conduct appropriate economic policies to cut global imbalances, a reference to the need for the United States to reduce its current account and budget deficits.
Touching on the yen's recent strength vs. the dollar, Tanigaki said the exchange rates "do not stably reflect economic fundamentals and are unwelcome."
He also renewed a warning that Japanese monetary authorities could intervene in the currency markets, if necessary, to arrest the yen's further climb against the dollar.
Record foreign reserves
Japan's foreign-exchange reserves climbed to a record $840.09 billion at the end of November, up $2.21 billion from a month earlier, the Finance Ministry said Tuesday.
The reserves have hit an all-time high for four consecutive months now.