RIO DE JANEIRO (Reuters) -Japan has urged its G20 peers to be increasingly vigilant to excessive foreign exchange rate fluctuations driven by speculation, Tokyo's top currency diplomat Masato Kanda said on Thursday.

Speaking at a press conference at the G20 finance ministers and central bank governors meeting in Rio de Janeiro, Kanda said attention needed to be paid to risks of prolonged high interest rates in some countries destabilising financial markets.

"Japan has said we must be increasingly vigilant to spillover effects (of such risks) and excessive currency rate fluctuations as a result of speculation," said Kanda, vice finance minister for international affairs.

"And we need to respond appropriately based on G20 commitments that excessive currency volatility and disorderly movements have a negative impact on the economy and financial stability," he said.

The comments follow recent wild swings in the Japanese yen.

The currency rallied for a fourth session against the dollar on Thursday, recovering from 38-year lows hit earlier this month, as investors unwound long-running bets against the currency ahead of a Bank of Japan meeting next week.

Analysts had blamed wide U.S.-Japan interest rate differentials for the yen's weakness.

The final draft of the G20 joint statement, seen by Reuters, reaffirms their April 2021 exchange rate commitment.

The 2021 statement said G20 countries "remain committed that our exchange rates reflect underlying economic fundamentals."

Kanda, who led massive bouts of yen-buying intervention in 2022 and 2024, sees his term end next week as vice finance minister for international affairs - a post that oversees Japan's currency policy and coordinates economic policy with other countries.

He will be succeeded by Atsushi Mimura, a financial regulation veteran.