The yen's sharp rise is harmful to Japan's export-led economy, the finance minister said Friday as the greenback traded around Y85, its lowest level since the mid-1990s.

Finance Minister Hirohisa Fujii did not signal Tokyo planned to immediately intervene in currency markets, something it last did in March 2004.

Fujii said the yen's rapid rise was one-sided and "harmful" to the economy and said the government was closely watching the currency fluctuations.

"We will take appropriate action toward disorderly movements," he said.

The dollar briefly dipped below Y85 in early Asian trade, then bounced back and was changing hands at Y85.88 in Tokyo at around 9:45 am (0045 GMT).

Fujii said Japan would have "discussion with the US and European financial authorities" as necessary, according to Jiji Press news agency.

Japan's economy is crawling out of a deep recession on rebounding exports but a stronger yen threatens the competitiveness of Japanese exporters.