Omi says Japanese, U.S. economies both firm

TOKYO (Reuters) - Japanese Finance Minister Koji Omi said on Monday that he agreed with U.S. Treasury Secretary Henry Paulson that both Japanese and U.S. economies are firm.

Omi also said the market mechanism is working and he was not worried about recent movements in the stock and currency markets.

"We agreed that both United States and Japanese economies are moving smoothly," Omi told reporters after meeting Paulson.

The yen surged on Monday as another wave of investors rushed to reverse bets against the Japanese currency with the market still anxious over tumbling stock markets.

U.S. Treasury officials said that during his two days in Japan, the world's second-largest economy, Paulson would encourage Prime Minister Shinzo Abe and other top officials, including Finance Minister Koji Omi and Bank of Japan Governor Toshihiko Fukui, to do all they can to speed up growth.