Finance Minister Sadakazu Tanigaki said on Sunday Japan will move cautiously in managing its massive foreign currency reserves.
"Japan's foreign reserves are large so how we manage them would have a big impact on the foreign exchange markets and on the global economy," he told a news conference after the Inter-American Development Bank (IADB) kicked off a 3-day annual meeting.
Tanigaki said: "Japan will move carefully and cautiously in its management of (its) foreign reserves."
Japan has repeatedly said it has no intention to change the composition of its foreign reserves, which are mostly denominated in U.S. dollars.
IADB President Enrique Iglesias said in a speech on Sunday that one risk in the global economy would be a rise in interest rates caused by any change in the composition of central bank international reserves, particularly in Asia.
Separately, South Korea's central bank said on Sunday it would not seek to diversify currencies in its foreign reserves away from the dollar because that would push the won higher, Yonhap news agency quoted the bank's chief as saying.
Currency markets have been on alert for any sign of changes in the reserve policies of Japan, China, Taiwan and South Korea, which are the world's top holders of external reserves, holding nearly $2 trillion between them.
Japan's foreign reserves, at $838 billion as of the end of March, are the largest in the world.
Tanigaki also said the world was watching "every move" of China's robust economy because of its impact not only on Japan but on the global economy, and said he felt Chinese authorities were well aware of the problems facing their country.
"I believe they are making efforts so that their economy does not derail," he said, adding Japan would continue to monitor the situation closely.