The yen has been weakening steadily for months
The yen has fallen more than 10% against the US dollar in the past two months with the apparent blessing of the Japanese government, which was thought by analysts to see benefits for Japanese exports.
Finance minister Masajuro Shiokawa's comments came after the yen hit a fresh low of 133.37 to the dollar on Wednesday.
The currency's decline to 39-month lows has been "a little too rapid," said Mr Shiokawa.
Changing tack
The Japanese currency strengthened by more than a full yen against the dollar to 132.07 by 0615 GMT on Thursday.
Analysts put Mr Shiokawa's comments down to fears that the yen's decline - and the government's tacit endorsement - could alarm foreign investors into ditching Japanese assets by encouraging a bleak view of the economy's overall prospects.
"The rapid drop of the yen is raising fears overseas investors will instigate a 'sell Japan' scenario," said Koji Sakuratani of Asahi Life Asset Management.
The yen's slide began a few days after Japan was officially declared in recession last autumn.
Cracks show
Mr Shiokawa's support for the yen was echoed by Zembei Mizoguchi, head of the Finance Ministry's international bureau, who insisted the economy's "fundamentals are sound."
"The yen's fall has progressed considerably. Rapid moves are not good in the daily foreign exchange market."
The finance minister also said he was unhappy with swift fluctuations.
"I think a move of about one yen is within market mechanisms but a move of more than two yen in just about 10 days is a different story," said Mr Shiokawa.
But the stance was somewhat undermined by Japan's former top financial diplomat, Mr Eisuke Sakakibara, who said the yen's fall reflects economic fundamentals - and has some way to go.
"Japan's economic fundamentals are extremely weak now...I wouldn't be surprised to see the yen fall to 150-160 to the dollar towards the year-end," said Mr Sakakibara, ex-Vice Minister for International Affairs at the Finance Ministry.
Foreign car sales slow
Some analysts have taken a cynical view of the finance minister's bid to prop up the yen.
"The government may not want the yen to fall too much during (Prime Minister Junichiro) Koizumi's trip" around south-east Asia, said Toshiyuki Takamatsu of ABN Amro Bank in Toyko.
In a further sign of the depth of Japan's recession, sales of imported vehicles in December were 2.9% below year-earlier, figures from the Japan Automobile Importers' Association showed.
The Japanese government has repeatedly urged consumers to kick start the economy by spending more of their savings.
However, with unemployment at record post-War highs, consumers proved reluctant to do so.
During 2001, imported vehicle sales fell 0.1% compared to 2000.