The United States warned Japan on Friday to stick to the rules when it came to the value of its currency, setting the stage for a potentially uncomfortable meeting of G-7 finance ministers outside London.

Treasury Secretary Jack Lew said that Japan had "growth issues" that needed to be dealt with but that its attempts to stimulate its economy needed to stay within the bounds of international agreements to avoid competitive devaluations.

"I'm just going to refer back to the ground rules and the fact that we've made clear that we'll keep an eye on that," Lew told the CNBC news channel.

Declassified: ‘Financial War’ Could Wipe Out 50% of Your Wealth’

The yen hit a four-year low against the dollar earlier on Friday beyond the psychologically important 100 yen mark. It also trades at a three-year low against the euro.

The moves were driven in part by news that Japanese investors have been shifting into foreign bonds, a move that has been expected since the Bank of Japan unveiled a massive stimulus plan last month.

Japan insisted that its tumbling yen would not be a hot topic at the meeting of finance chiefs, despite concerns in other camps about a looming currency war.

"The Bank of Japan isn't targeting currency rates, which are determined by the markets," the bank's governor, Haruhiko Kuroda.

There has been concern among policymakers that Japan is engineering an export-led recovery that could hinder other regions' ability to grow.

Other central banks have also ramped up their stimulus efforts in the face of weak growth.

The European Central Bank cut interest rates last week and may boost small business lending while the U.S. Federal Reserve is continuing its sizable bond purchase program.

The Bank of England has recently expanded a credit scheme and finance minister George Osborne has tasked the next central bank governor, Mark Carney, with finding new ways to boost growth when he succeeds Mervyn King in July.

BANK REGULATION

Britain's Osborne, who chairs the talks, is keen for his peers to focus on what more central banks can do to help growth at a time when most governments are trying to cut spending and raise taxes.

"(This is) an opportunity to consider what more monetary activism can do to support the recovery, while ensuring medium-term inflation expectations remain anchored," Osborne said.

Britain's finance ministry said the talks over Friday and Saturday at a 17th-century country house were also likely to focus on bank regulation, tax avoidance and free trade.

The emergency rescue of Cyprus in March acted as a reminder of the need to finish an overhaul of the banking sector, five years after the financial crisis began.

As at last month's International Monetary Fund meeting, Germany may come under renewed pressure to give more support to a banking union in the euro zone. The plan could help strengthen the single currency area, but Berlin worries it may pay too much for future bank bailouts.

While the first step — to create a single bank supervisor under the ECB — looks set to be in place by mid-2014, a second pillar, a 'resolution' agency and fund to close failed banks, is in doubt. And there is little prospect that a third leg, a single deposit guarantee scheme, will ever see the light of day.

But Osborne will nonetheless push his fellow G-7 ministers to set up mechanisms to shut down failing banks, which would otherwise be considered "too big to fail."

Some of the officials said they did not know why Britain, which is chairing the G-7, had called the meeting so soon after the IMF discussions.

But Osborne said there was value in talks that were more informal than larger meetings of the world's major economies which form the Group of 20.

The G-7 — the United States, Germany, Japan, Britain, Italy, France and Canada — lost its mantle as the main forum for thrashing out differences over the global economy in 2009 when responsibility was passed to the G-20.

No communiqué and no formal decisions are expected at the meeting, which will help prepare the way for a G-20 leaders' summit in Russia in September.

Declassified: ‘Financial War’ Could Wipe Out 50% of Your Wealth’