Bank of Japan Governor Kazuo Ueda hintedonlineholdemHe has no big problem with long-term bond yields rising to their highest levels since 2012, saying they should be guided by the market.

"Long-term bond yields are in principle determined by financial markets," Ueda told reporters near the Italian town of Stresa after the meeting of G7 finance ministers and central bank governors."I will continue to monitor market trends closely."

Japan's 10-year bond yield hit a 12-year high on Friday as investors lingered on speculation that the Bank of Japan will raise interest rates further. Ueda's neutral statement shows that at least so far, fluctuations in yields have not met the conditions for action promised by the Bank of Japan.

Junichi Suzuki, the finance minister who sat next to Ueda and the decision maker on currency intervention, hinted that the G7 finance ministers understood Japan's situation, saying that his colleagues believed that excessive exchange rate fluctuations were harmful to the economy.