G7 finance ministers and central bank heads will meet on May 20-21 in the northeastern Japanese city of Sendai.

Japan, which will host the G7 meeting, has signalled its readiness to intervene in the market to weaken its currency despite a recent U.S. Treasury report on currencies that appeared to warn against unilateral intervention.

The yen hit an 18-month high against the dollar this month.

"Currencies will be discussed as needed as part of a broad debate on global economy," Aso told reporters after a cabinet meeting. "We think stability in currencies is the most important."

However, Aso noted it would be hard to persuade Germany and Britain to deploy fiscal spending as part of wider G7 efforts to rev up global growth through coordinated fiscal stimulus.

Coordinated measures across bloc countries are seen as an important precursor to more fiscal steps from Japan.

"Unlike Japan, fiscal policy is determined by the constitution in Germany, so it won't be easy. Britain faces difficult problems such as an exit from EU, so it won't be easy," he said.

The G7 finance chiefs must deepen debate on how to balance monetary, structural and fiscal policies in a way that takes into account each country's specific situation, he added.

(Reporting by Tetsushi Kajimoto; Editing by Chang-Ran Kim and Sam Holmes)

By Tetsushi Kajimoto