Yoshiki Takeuchi also said a communique issued by Group of 20 finance leaders over the weekend confirmed their shared understanding that stable currency moves were important.
"Financial markets have been volatile since the start of this week", reflecting concern over the epidemic, Takeuchi, vice finance minister for international affairs, told reporters.
"(The G20 finance leaders) agreed to continue monitoring market developments with a sense of urgency, given heightened market volatility," he said.
Asian shares took a beating on Tuesday on fears the virus epidemic, which has spread outside the region, could wreak greater havoc to the global economy than initially expected.
The government has already compiled a spending package to fend off overseas risks to Japan's economy, Takeuchi said.
"Depending on developments, the government may need to consider what more it can do with cooperation from the Bank of Japan," he said.
Takeuchi made the comments after a meeting with his BOJ and Financial Services Agency counterparts to discuss recent market developments. The gathering is held once every few months, usually when markets become volatile.
In a communique issued after their meeting in Riyadh over the weekend, the G20 finance leaders reaffirmed their agreement that excessive volatility or disorderly movements in exchange rates could have an adverse impact on the economy.
By Daniel Leussink and Takahiko Wada
