The Obama administration declined to brand China a manipulator of its exchange rate while calling the yuan undervalued and vowing to press for further appreciation of the currency.

The Treasury Department, releasing its semi-annual report to Congress on the currency policies of major trading partners, said yesterday it will "press for policy changes that yield greater exchange-rate flexibility" in the yuan. The report also criticized Japan for unilaterally selling the yen in August and October, adding that the U.S. didn't support those interventions.

The U.S. contends that China uses an undervalued currency to give its exporters an unfair advantage in overseas markets and boost growth. At the same time, the administration of President Barack Obama has sought to avoid actions that could cause friction with the world's No. 2 economy and the second-largest U.S. trade partner.