TOKYO (AFX-ASIA) - The dollar/yen was firmer in midafternoon after the Ministry of Finance ordered intervention in the market to prevent a further weakening of the dollar, dealers said. "We have just taken action in the market," said a ministry official official, who declined to be named, confirming the intervention. The move was taken as the dollar dipped to as low as 120.10 yen, with the US currency then rising to around 120.95 but thereafter quickly falling back. However, dealers said the Bank of Japan, on behalf of the ministry, will likely have to take repeated action to prevent a further dollar depreciation. "My feeling is there's a high probability of market intervention in European market time," said Koji Fukaya, chief foreign exchange analyst Bank of Tokyo-Mitsubishi. Fukaya said trade and current account related flows as well as portfolio flows away from the US, given uncertainty over the financial markets there, are combining to put the dollar under pressure. "I think the MoF will have to continuously intervene in the market as there's still the huge current account ... and there's no one looking to (invest) on a global basis. Japanese investors are very risk averse," he said. "If they don't move, the yen will appreciate against the dollar. It's difficult to push up the dollar/yen against a general dollar depreciation. I think they will move at 120 lows or below 120 yen." Remarks by US President George Bush this morning, interpreted as a tacit acceptance of dollar weakness, put further downward pressure on the currency. "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. "The market believed that that comment showed that they accept the dollar depreciation so participants are not afraid of US action," Fukaya said. The euro has also risen sharply against the dollar, triggered by news WorldCom Inc will restate its financial statements due to improper accounting. 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. 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 news provided an excuse to sell down an already weak US currency. "The Japanese investors missed their chance to buy euro. WorldCom 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. However, participants noted that in the longer term the Japanese economy will be badly hit by a more substantial downturn in the US. "In the longer term there is a risk of Japanese economic downside as it effects the exporter profits," BoTM's Fukaya said. "If the US deteriorates towards the end of the year, then that may affect the yen through the Japanese exporters. The economy will confront difficulties towards the end of the year."