Japan's top currency official said on Wednesday that his country's weakening economy was suffering from a strong yen and signalled that Tokyo may intervene "decisively" to combat it.

"Exports have been influenced by supply chain changes and problems in Europe, some advanced economies and also in China. And we are also suffering from a very appreciated yen," Mr Takehiko Nakao, vice finance minister for international affairs, said in a speech in London.

"If needed we will take very decisive action in the market, that is our stance."

Japanese authorities have stayed out of the currency market since their last intervention in November. But they have resumed issuing verbal threats recently on concerns that a stronger yen could derail the export-dependent economy's recovery from last year's earthquake and tsunami.

Tokyo spent a record 8 trillion yen (S$127.6 billion) in unilateral intervention in the currency market on Oct 31 last year, when the dollar hit a record low of 75.31 yen, and another 1 trillion yen in November on undeclared forays into the market.

The dollar was at 78.51 yen on Wednesday.

TODAY