TOKYO, Feb 12 - Group of Seven nations agree that volatility in currency markets is undesirable, and the possibility of coordinated intervention to prevent it cannot be ruled out, a top Japanese Ministry of Finance official said on Thursday. "If coordinated intervention is necessary, we can't rule out the possibility of it taking place," Hiroshi Watanabe, head of MOF's international division, said at a regular briefing when asked if Japan might help in any intervention to keep the euro from rising. The euro was close to a record high against the dollar on Thursday, raising speculation over whether the European Central Bank would step in to bring down the currency because of its possible damaging effects on exporters' profits. Japan has been much more active in its intervention in the past year, selling some 27 trillion yen ($256 billion) since January 2003 to try to curb the yen's rise.
Like their European counterparts, Japanese authorities are worried about the damage to exporters from surges in the yen at a time when strong export growth is fuelling Japan's recovery. The European Central Bank declined to comment on Watanabe's remark. Watanabe reiterated that the G7 statement after its meeting in Florida last weekend, which included a line on the undesirability of volatility, supported Japan's stance on foreign exchange rates. "Our intervention stance is the same after the G7 as it was before," he said. "We won't do anything meaningless, but overshooting and disorderly moves are not good for economic growth. To avoid these we will do what is needed when it is needed." Watanabe added that other reforms were needed for Japan to ultimately achieve its aim of a stable currency reflecting economic fundamentals. "Looking ahead, it will be difficult to do something about currencies just through intervention," he said, adding that as the G7 statement had said, structural reforms were important.//www. .com