TOKYO (AFX-ASIA) - The euro rose sharply against the dollar, triggered by further negative news from the US, with this morning's news that WorldCom Inc plans to restate its financial statements due to possible fraud, dealers said. WorldCom Inc said it plans to restate its financial statements for 2001 and the first quarter of 2002 following an internal audit of its capital expenditure accounting. The dollar was also sharply lower against the yen, nearing the 120 yen level despite threats of intervention by the Bank of Japan, particularly after remarks by US President George Bush this morning. "My position is that the dollar will seek its level based upon market forces," Bush said at a news conference in Calgary ahead of the G8 summit. Minori Takeuchi, forex analyst at the Tokyo branch of JP Morgan Chase, said the comment provided a further catalyst for the dollar's decline. "I think it affected the market. When Bush said that, people started to sell the dollar/yen, though not so much," she said. Some investors have begun to question the assumption that the US was undisturbed by the dollar's fall after the plunge on Wall Street and comments by Japan's finance ministry suggesting risks to the global economy. "I think because of Bush's statement people are more sure the US is not concerned," Takeuchi said. Meanwhile, the euro was pushed higher against the dollar on the WorldCom news. In a statement released on its website, WorldCom said transfers from line cost expenses to capital accounts were not in accordance with GAAP, and estimated the improper transfers at 3.055 bln usd for 2001 and 797 mln usd in the first quarter of 2002. Without these transfers, the company's reported EBITDA would be reduced to 6.339 bln usd for 2001 and 1.368 bln usd for the first quarter of 2002, and the company would have reported a net loss for 2001 and for the first quarter of 2002, it said. "The Japanese investors missed their chance to buy euro. The stock price of WorldCom was no surprise but it was used as an excuse to buy," said Hidehiko Inamura, foreign exchange vice president at Citibank. "We still believe the current sentiment against the US economy is extreme. But only the BoJ is supporting the dollar. No (Japanese) investors, including pension money, are going abroad. Japanese corporates are neutral," he said. "We realise there's a huge amount of dollar short positions against the euro so this is getting risky," he added. Ministry of Finance director-general Zenbei Mizoguchi said today that Japanese authorities are ready to take action in the market if necessary, adding that the US economy remains strong relative to Japan and Europe. However, the central bank will find intervention to support the dollar against the yen difficult, given that the euro is the driving force for the market. "We are not sure (about intervention) because it's led by the euro. I don't exclude the possibility but I'm a little bit sceptical. It's sure they don't want it to go below 120 yen," said JP Morgan Chase's Takeuchi. "If the MoF intervened a big amount, it could be effective but it may be less effective (given Bush's remarks). Also the summit's still ongoing so maybe its more difficult," she added. Dealers said the dollar's drop through the 121 yen level was not a significant technical support level. "Psychologically, maybe (it has significance) but our technical analyst says 121 yen is not an important level. The big support is 118 yen and ahead of that 119.70," Takeuchi said.