The following article can be found in The Financial Times here.

Japan has called on South Korea and China to “act responsibly” on exchange rate policy amid growing fears of a currency war that could undermine global growth.

Naoto Kan, the Japanese prime minister, on Wednesday said efforts by individual nations to depress the level of their currencies had no place in G20 cooperation.

We’d like South Korea and China to act responsibly within common rules,” Mr Kan said in response to a question about South Korean and Chinese policy.

Currency conflicts are expected to dominate next month’s summit of G20 leading economies in Seoul. Concerns about a currency war have grown as Washington and Beijing are increasingly locked in a bitter dispute over exchange rates.

The US is calling for renminbi appreciation, while China blames loose US monetary policy for propelling destabilising fund flows into emerging markets. Thailand on Wednesday became the latest country to introduce measures to curb “hot money” inflows by reinstating a tax on foreign purchases of Thai bonds.

While Mr Kan noted that Japan’s intervention in the currency markets last month made it difficult to comment on the actions of other countries, Tokyo sees its attempt to curb the yen’s rise very differently.

The Japanese government had not previously aired concerns in public about Seoul’s currency policy, despite the stiff competition posed to Japanese companies by Korean rivals that have benefited hugely from won weakness over the past two years.

The yen has climbed 29 per cent against the dollar since the collapse of Lehman Brothers in September 2008, while the won has weakened 1.2 per cent against the greenback and 23 per cent against the Japanese currency.

Traders say the Bank of Korea has been in active in combating won appreciation, although it has allowed an 8 per cent rise against the dollar in the past three months that could help Seoul avoid censure on the issue during the G20 gathering.

South Korea says it does not intervene to prevent the appreciation of the won, but simply “smoothes” the market in times of volatility.

Yoshihiko Noda, the Japanese finance minister, also on Wednesday said “competitive currency devaluation” would be a “big issue” at the Seoul G20 gathering.

“South Korea intervenes in the currency markets as needed [while] China in June started to move towards a more flexible renminbi, but the pace is slow,” Mr Noda said.

He suggested that as the host of the G20, Seoul would face increased scrutiny on currency issues. South Korea did not immediately respond to the Japanese comments. But officials in Seoul are likely to be dismayed by Japan’s linking of their currency policy with that of China, which has for years waved aside calls to allow the renminbi to trade more freely.

Japan insists that its massive $25bn currency intervention on September 15 was intended to curb damaging volatility rather than set a particular level for the yen.

However, pressure for a return to the market has been growing as the yen has since hit successive 15-year highs against the dollar. In early afternoon trade in Tokyo it was trading at Y81.85 to the dollar, not far off a fresh high of Y81.39 set earlier in the week.

Separately on Wednesday, Cui Tiankai, Chinese deputy foreign minister, said China was trying to avoid a currency war, but other countries needed to cooperate.

“We are doing our best to avoid that but it will require the effort of all the G20 members, not China alone,” Mr Cui said during a visit to Seoul.

Mr Cui said divisions over the issue would “not boost…market confidence” ahead of the G20 meetings in Seoul. He countered accusations that China was one of the leading causes of global imbalances by insisting that Beijing was gradually strengthening the renminbi, stimulating domestic demand and boosting its imports.

Tim Geithner, US Treasury secretary, on Tuesday said he accepted that the renminbi’s rise would be gradual, but said it neeed to be “significant”. He added that he saw “no risk” of a global currency war.