Japan is "on standby" to take all possible steps to counter excessive volatility in the currency market, its top currency diplomat said Wednesday, expressing concern over rapid yen movements as the currency fell to a one-year low against the U.S. dollar.

The latest verbal warning by Masato Kanda, vice finance minister for international affairs, came as yen selling accelerated despite intervention fears after the Bank of Japan loosened its grip on long-term government bond yields but maintained monetary easing on Tuesday.

"We are ready to take action without ruling out all possible options against excessive volatility," Kanda told reporters. "We are on standby."

Japanese authorities traditionally issue warnings before they intervene in the currency market. The previous yen-buying, dollar-selling intervention was conducted about a year ago to counter what was described as the yen's "rapid" and "one-sided" depreciation.

Kanda said that recent yen moves are excessive, adding that "appropriate action" should be taken because of their impact on people's livelihoods.

The dollar traded in the lower 151 yen zone after climbing as high as 151.74 yen overnight in New York.

The BOJ decided to allow 10-year government bond yields to rise above its previous ceiling of 1.0 percent at the end of a two-day policy-setting meeting on Tuesday.

The widening interest rate gap between Japan and the United States has been a major factor behind the yen's weakness. The Federal Reserve has been raising interest rates aggressively to fight inflation.

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