Currencies were the main topic as G7 ministers gathered in Essen

As finance ministers from the seven biggest economies gathered in Essen, both the Japanese and Chinese delegates defended the value of their currencies.

China, which is joining the talks despite not being a G7 member, said it wanted the yuan to be more flexible.

Both it and Japan have been accused of undervaluing their currencies.

Such a move, which both nations deny, would make their exports artificially competitive on the global market.

'Increased flexibility'

While the US is leading the calls for China to allow the yuan to float freely, it is the European Union which sees the yen as currently undervalued.

Speaking before the two-day G7 gathering started with a formal dinner on Friday night, Japanese Finance Minister Koji Omi said the yen's current low value simply reflected the country's ongoing economic recovery.

Meanwhile, China's central bank chief Zhou Xiaochuan said the yuan - which is currently tied to a narrow band against the dollar - would see its flexibility increased.

The G7 gathering will run until Saturday evening.

Official topics up for discussion range from the world economy in general, to global warming and improving stability in financial markets.

The G7 comprises the US, Canada, the UK, France, Germany, Italy and Japan.

In addition to China, other nations in attendance are Brazil, India, Mexico, Russia and South Africa.