"I am concerned with the escalation of 'currency war' rhetoric," Flaherty told G20 finance ministers meeting in Moscow Friday, saying it added to the "uncertainty that is holding back stronger growth."
"We must send a signal by being unequivocal and united in our support for market-determined exchange rates and our opposition to protectionism."
The meeting comes as G20 members accuse each other — and especially Japan — of trying to lower the value of the yen to stimulate its economy and get a competitive edge over other countries.
Japan, the world's third-largest economy, saw the yen fall to a 21-month low against the U.S. dollar this week and a near three-year trough against the euro.
Japan is trying to pull out of the economic malaise that followed the 2008 financial collapse.
Earlier this week, the volatility in the currency markets prompted the Group of Seven leading industrial nations, which includes Canada, the U.S., Germany, Britain, France, Italy and Japan, to warn that volatile movements in exchange rates could adversely hit the global economy and to reaffirm their commitment to market-driven exchange rates.
On Friday, the yen strengthened ahead of the G20 meeting, with analysts expecting pressure to be exerted on Japan's finance minister and central banker to at least commit to not allow the yen to fall much more.
Russian President Vladimir Putin also called in a speech for the ministers to consider the political and social implications of their crucial policy steps.
Putin said financial authorities around the world should be mindful of political consequences as well as social implications on "various groups of the society" that many financial decisions lead to.