Japan's top currency diplomat, Masato Kanda, has said he is closely watching how central bank decisions, including an expected end to negative interest rates in Japan, affect markets, as speculation over the events could trigger volatile asset moves.

Kanda, who is vice finance minister for international affairs, declined to comment on heightening market expectations that the Bank of Japan will end negative rates in April, saying it was "among important events" that currency authorities were closely watching.

"The timing and pace of U.S. interest rate cuts and the outlook for the BOJ's policy are drawing strong market attention, and could be used as an excuse for speculative trading," Kanda said in an interview on Wednesday.