The US has warned Japan not to hold down the value of its currency to gain a competitive advantage in world markets. This comes as the new government in Tokyo pursues aggressive policies aimed at recharging growth.

In a semi-annual report on currency practices of major trade partners, the US says it's watching Japan's economic policies. Last week the Bank of Japan shocked markets with the latest drop in the yen.

It announced plans for a massive increase in money supply, pledging a sharp increase in purchases of government bonds and other assets. The dollar has risen nearly 7 percent against the yen since then. It's now up 15 percent since Japanese Prime Minister Shinzo Abe came into power on December 26th.