Fujii hints at intervention to stem steeper yen rise+

TOKYO, Sept. 29 Kyodo -
Finance Minister Hirohisa Fujii indicated Tuesday the government could step
into the currency market to stem the yen's rapid appreciation, saying Tokyo may
take steps if exchange rates move ''abnormally.''

''I've never said that I accept the yen's appreciation,'' Fujii said at a news
conference. ''If (foreign exchange rates) move abnormally, appropriate steps
for the sake of national interests may be taken.''
The yen has surged relative to the U.S. dollar after Fujii's repeated comments
showing a reluctance to intervene in the currency market. A further rise of the
yen against the U.S. dollar and other currencies will hurt Japanese exporters.
Fujii said the foreign exchange market may have misunderstood his recent
remarks as suggesting Japan is tolerant of a stronger yen.
''What I'm saying is just a matter of course. Maybe the market distorted my
meaning,'' Fujii said.
Before the news conference, Fujii told reporters that currency moves have been
''too sudden'' and become ''one-sided,'' referring to the yen's recent surge.
He said the yen's recent rise against the dollar is basically due to U.S.
economic policy and vowed to analyze currency movements carefully.
Toyoo Gyohten, a currency adviser to Fujii, backed the minister's stance on
market intervention in the event of abnormal currency moves, saying, ''I think
it is right.''
Gyohten, a former vice finance minister for international affairs, said he does
not think the currency market in recent days has been highly unstable or that
the yen's value has been rising rapidly, when he spoke to reporters at the
ministry after he was officially appointed Tuesday as Fujii's special adviser
on foreign-exchange issues.
On Monday, the dollar hit a nine-month low -- moving as low as 88.23 yen at one
point in Tokyo trading -- partly because traders used Fujii's repeated remarks
suggesting reservations about market intervention as a cue to step up buying of
the yen.
During his talks with U.S. Treasury Secretary Timothy Geithner in Pittsburgh
last Thursday, Fujii said Japan would ''in principle'' not intervene in the
currency market.
Among Cabinet members, Economy, Trade and Industry Minister Masayuki Naoshima
defended Fujii from criticism that his comments had caused a disturbance in the
currency market.
Naoshima said the yen's rise has come amid dollar selling on prospects that
U.S. interest rates will remain low and he stressed his ministry is checking
any negative impact on corporate earnings in Japan.
''I don't think comments by the minister (Fujii) had such a big impact,''
Naoshima said at a news conference.
Still, the industry ministry said Tuesday it will investigate the impact of the
yen's recent steep rise on major Japanese companies.
The ministry will survey a total of around 130 manufacturers and
nonmanufacturers, asking them what countermeasures they will take if the yen's
value fluctuates wildly against the dollar or the euro.
The results of the survey will be compiled by early October, it said.
==Kyodo