Japan said Wednesday it would continue reducing its Iran oil imports "considerably", while hailing a US decision to exempt it from new sanctions against doing business with the nuclear aspirant.

"We have explained to the US side that this trend will accelerate in the future and that we will carry out our reductions considerably," Chief Cabinet Secretary Osamu Fujimura told reporters.

Fujimura did not elaborate on the planned cuts, but Japan's Economy, Trade and Industry Minister Yukio Edano said that Tokyo has already reduced its Iran oil shipments by 40 percent over the past five years.

The United States on Tuesday said it was exempting Japan and some European Union members from tough new sanctions aimed at pressing Tehran over its nuclear programme.

Japanese Finance Minister Jun Azumi described the US decision as "an achievement of negotiations".

"I believe the United States welcomes Japan's response, including actions it will take in future (to cut imports)," he told reporters on Wednesday.

Last year, Iranian oil accounted for about 8.8 percent of Japan's crude imports, according to the Petroleum Association of Japan, which totalled 3.6 million barrels a day.

Japan buys about half its oil from Saudi Arabia and the United Arab Emirates, but Edano warned that "imports of Iranian crude won't become zero immediately".

Foreign Minister Koichiro Gemba said Tokyo was in talks with the European officials over a separate EU proposal concerning sanctions on insurance for Iranian crude shipments.

Japanese firms tend to buy insurance for crude oil shipments domestically, but the policies are often sold to European re-insurers so the proposed EU sanctions could ultimately affect Japanese shipments.

"Depending on the details of the EU measures being discussed right now, there are risks of them severely affecting the stable supply of oil to Japan," Gemba told reporters.

Also Wednesday, Gemba said China and India should reverse course and cut their Iranian oil imports -- both are economic partners with Tehran and have so far resisted Western calls to cut shipments.

The US sanctions bar financial institutions that do business with Iran from operating in the United States, effectively making them choose between the Islamic republic and the world's largest economy and banking superpower.

Japan pressed hard for an exemption from the sanctions, noting that its energy shortfall after the Fukushima nuclear crisis a year ago led it to shut down most of its atomic plants.

Japan -- which has virtually no fossil fuels of its own -- has historically maintained cordial relations with Iran. But Japan has pared down its investments in the Islamic republic in recent years over the nuclear concerns.

Akio Shibata, president of the Tokyo-based National Resource Research Institute, said Japan was not facing an immediate supply shortage, but the sanctions would likely push up oil prices, hurting the region's energy-hungry economies.

"I can't say to what extent the prices will increase, but that will of course have a negative impact on the Japanese economy, as costs of everything from manufacturing to farm products will increase," he told AFP.

"Asian countries will be particularly hit by the potential effects of the US sanctions," he added.

Iran says that its nuclear programme is meant for peaceful purposes, but Israel and a number of Western countries fear that the regime is trying to build a nuclear bomb.

Secretary of State Hillary Clinton said that Washington would exempt financial institutions from 11 nations -- Belgium, Britain, the Czech Republic, France, Germany, Greece, Italy, Japan, the Netherlands, Poland and Spain.

"The actions taken by these countries were not easy," Clinton said in a statement.

"They had to rethink their energy needs at a critical time for the world economy and quickly begin to find alternatives to Iranian oil, which many had been reliant on for their energy needs," she said.