He is due to meet the French President, Jacques Chirac, on Thursday, and the French Prime Minister, Lionel Jospin, on Friday.

Mr Obuchi's visit to France, Italy and Germany comes after the euro made a strong entrance onto the world's financial stage on Monday, sending the dollar lower and the yen higher.

Last year the yen plummeted close to ¥150 to the dollar - now it is back again

The dollar fell to a 27-month low of 110.46 yen on Tuesday before recovering slightly on Wednesday.

There are fears that a weak dollar will hurt the Japanese export industry and threaten any chance of a recovery in the world's second largest economy this year.

Before leaving Tokyo, Mr Obuchi said Japan felt a "sense of urgency" in making the yen a fully-fledged third pillar of a monetary system which was no longer totally dollar-dominated."

Scepticism over yen's role

Some commentators remain sceptical about Japan's recent efforts to boost the stature of the yen, which now has around 5% of the international currency market.

"Japan's sudden effort to make the yen an international currency comes too late and will be difficult to achieve in the current period of crisis," the French daily Le Monde said in a recent editorial.

The Japanese premier plans to meet French President Jacques Chirac on Thursday evening and Prime Minister Lionel Jospin on Friday before travelling on to Italy and Germany.

Mr Obuchi is also likely to propose a plan for managing currency rate fluctuations between the yen, dollar and euro aimed at curbing turmoil in international markets.

He said at the weekend: "While maintaining the general principle of floating rates, we should put an emphasis on stability in the markets and create a new monitoring system aimed at keeping rates within a certain sphere."

While the United States has generally opposed currency controls, some European leaders have called for rules to prevent sudden and sharp currency movements.

But Economic Planning Agency Minister Taichi Sakaiya, who came to Paris ahead of Mr Obuchi, said Tokyo had no plans at this stage to present concrete ideas.

He added: "I think the present level of the yen is within our expectations."