Finance Minister Sadakazu Tanigaki repeated on Tuesday that the Japanese authorities would intervene in the foreign exchange market if currency rates deviated from economic fundamentals. "Our basic stance is to act in a timely way and decisively if movements deviate from fundamentals. Our stance is nothing more, nothing less than that," Tanigaki told a regular news conference. Asked whether recent dollar weakness -- which came despite some positive U.S. economic indicators -- reflected economic fundamentals, Tanigaki said: "I am watching that with great interest." On Monday, the U.S. currency hit a record low against the euro and fell against the yen to its lowest level since April after strong U.S. employment data last week failed to dispel worries about the U.S. current account deficit. The dollar was at 105.60 yen as of 0122 GMT, compared with 105.48 in late U.S. trade and the seven-month low of 105.28 yen.
Asked about the impact of the yen's recent rise on Japanese corporate activity, Tanigaki said firms planned their business based on a view that currencies moved in line with fundamentals. "If there are movements (that do not reflect fundamentals), that would affect their businesses. Thus, we need to carefully monitor the movements." Analysts do not expect Japan to intervene yet as the dollar's weakness is not only against the yen and because many Japanese exporters have set internal foreign exchange rate projections for the fiscal year at around the current levels of 105 yen . The finance ministry has said it did not conduct any intervention in October -- the seventh straight month without action. Its last officially acknowledged intervention dates from mid-March when the yen was probing four-year highs against the dollar around 103.50 yen. They conducted 15 trillion yen ($142.2 billion) in yen-selling intervention in the first three months of the year after a record 20 trillion yen in 2003. ($1=105.50 Yen)///