Concerns by traders that the yen's slide could lead to a new round of Asian currency devaluations pushed U.S. and European stock markets down sharply. The Dow Jones industrial average closed down 159.93 points at 8,811.77. Most European markets also fell, with London's key Financial Times 100-share index closing down 2.25 percent. In Asia, Tokyo's benchmark Nikkei-225 index closed down 2.12 percent. Mr. Rubin spoke a day before Japan was expected to report that its economy contracted in the first quarter, as it had in the previous quarter.
Economists consider two consecutive quarters of contraction to mean that an economy is in recession.
Traders expect the Bank of Japan to intervene to help the yen, but such an effort might not stem the currency's slide over the long term. In Beijing, a Foreign Ministry spokesman called on Japan to halt the yen's slide, but insisted that the Chinese policy of not devaluing its currency remained unchanged. Mr. Zhu said. Chinese export growth slowed in May for the first time in 22 months, according to data released Wednesday, and analysts said the weakness of the yen and of the Japanese economy were key factors. The United States and other countries have pressed Tokyo to stimulate its economy and deregulate its financial system, hoping that renewed Japanese growth would trigger a recovery in Asia.