The remarks by Japan's finance minister underscored deep divisions over currency policies, an issue that could dominate G20 meetings in South Korea this and next month. A weekend International Monetary Fund meeting failed to defuse tensions.
"As chair of the G20, South Korea's role will be seriously questioned," Yoshihiko Noda told a parliamentary panel when asked about South Korea's currency intervention and its place in G20.
Record low interest rates and weak growth in rich countries have pushed global investors into emerging markets in search of higher yields, driving up their currencies and asset prices.
In response, several governments have stepped into foreign exchange markets or tried to curb capital flows, raising concerns that uncoordinated actions could stunt a world economic recovery.
Japan itself intervened in the currency market last month for the first time in more than six years to try to stem a rise in the yen that threatens its fragile economic recovery.
Noda declined to say whether Japan would intervene again as the yen hovers near a 15-year high against the dollar.
He drew a distinction between that intervention — which appears to have been a one-off move — and more frequent intervention by South Korea and China.
"In South Korea, intervention happens regularly, and in China, the pace of yuan reform has been slow," Noda said.
"Our message is that we have confirmed at the Group of Seven that emerging market countries with current account surpluses should allow their currencies to be more flexible."
South Korea did not immediately comment on the remarks.
Hopes for a G20 consensus look slim.
"It'll be impossible for the G20 to reach a consensus on currencies. Many emerging economies feel that they are being forced to intervene because of a weak dollar," said Etsuko Yamashita, chief economist at Sumitomo Mitsui Banking Corp.
"China will not succumb to outside pressure."
China's chief G20 currency negotiator Cui Tiankai said Beijing was trying to avoid a currency war but that no specific currency should be on the G20 agenda.
"We are doing our best to avoid that," Cui, a vice foreign minister, said in response to a reporter's question on the sidelines of a conference in Seoul. "But it requires efforts of all the G20 members, not China alone."
US Treasury Secretary Timothy Geithner, in a TV interview in Washington, said he saw no risk of a global currency war but wanted to maximize incentives for Beijing to let its yuan rise.
"We just want to make sure it's happening at a gradual but still significant rate."
In another sign of rift, European Central Bank Governing Council heavyweight Axel Weber said on Tuesday that the ECB's government bond buying program should be scrapped since it had failed to calm bond markets and risked blurring the lines between monetary and fiscal policy.
The comments highlighted a growing split from the stance of the US Federal Reserve and the Bank of Japan, which are more aggressive about easing monetary policy.
Analysts said Tokyo's criticism of Seoul stemmed from its worries about waning competitiveness against rival South Korean rivals. The yen has risen about 13 percent against the dollar so far this year and the won only about 4 percent.
"There is frustration here about the very heavy intervention in the Korean won because of the impact on some Japanese industries and their competitiveness," said Robert Feldman, chief economist at Morgan Stanley MUFG Securities in Tokyo.
"Japan feels it has been under pressure not to intervene because of G7 (Group of Seven) rules but people outside (of G7) seem to be playing by different rules."
Japanese Prime Minister Naoto Kan urged Seoul and Beijing to act responsibly but acknowledged Tokyo's delicate position.
"I want South Korea and China to take responsible actions within common rules, though how to say this is difficult because Japan has also intervened," he told lawmakers.
Japan sold 2.1 trillion yen ($25.65 billion) last month in its first currency intervention in more than six years to curtail the yen's strength against the dollar.
South Korea has intervened to the tune of about $13 billion since late September to cap the won's rise, but analysts said its intervention had been more aggressive in relative terms.
