US treasury secretary Henry Paulson has reiterated his position that the yen's value is being set by the markets and is not a cause of concern.

In late foreign exchange trading on Tuesday, the dollar climbed from ¥120.10 to ¥120.15 while the euro was valued at ¥155.95 and $1.2980.

Mr Paulson's comments suggest he will not be joining his euro-zone counterparts in pressuring Japanese policy makers about the yen's value at a G7 meeting later this week.

"This is a currency that is trading on a competitive, open market place," Mr Paulson said before the house of representatives' ways and means committee.

"Some people may not like where it is trading, but it is my job to fight for a free and open market," he said, reports the Washington Post.

He added that the US government had been pressing the Chinese government to free up the yuan to market forces and would continue to advocate non-interventionist policies.