TOKYO: Japanese Vice-Finance Minister Masakazu Hayashi said yesterday that the authorities would take decisive action against rapid movements in the currency market.

"I will not comment on specific levels, but recent movements have been a bit rapid,"he told a news conference when asked about the dollar's fall below 106 yen at one point overnight.

"Our stance of taking decisive action against rapid movements has not changed."

The dollar stood at 106.20/25 yen late yesterday.

Japanese officials sold a record 20 trillion yen (US$188.2 billion) in 2003 in an attempt to slow the yen's rise, and were believed to have intervened heavily in the currency market last week when the dollar dipped to a three-year low of 105.90 yen.

In another development, top Japanese officials reiterated their displeasure yesterday over the fall in the dollar given the strength of the US economy, and repeated that they would act when needed in the foreign exchange markets.

"As always, we will act appropriately. Given the current strength of the US economy, the dollar has fallen a bit too far,"Finance Minister Sadakazu Tanigaki said after a meeting with the heads of Japan's Chamber of Commerce and Industry.

Japanese officials are worried that the yen's appreciation against the dollar could nip an export-led economic recovery in the bud, and sold a record 20 trillion yen (US$188.2 billion) in 2003 in an attempt to slow the yen's rise.

Business leaders added their voices at the meeting with Tanigaki, calling for stability in the currency market, a Finance Ministry official who attended the talks said.

The dollar held steady against the yen, hovering around 106.25 yen yesterday. It dipped slightly under 106 yen on Wednesday, coming within sight of three-year lows around 105.90 set last week.

Tanigaki told the business leaders he would not touch upon specific foreign exchange levels but that authorities would take action to stem speculative moves, the ministry official said.

Nobuo Yamaguchi, chairman of the Chamber of Commerce and Industry, said earlier this month that the dollar/yen rate was near the limit that Japanese exporters could endure.

Japan's top financial diplomat meanwhile also called for stability in the markets and said movement in currencies should reflect the relative strength of the United States"economy.

"It is desirable that moves are stable,"Zembei Mizoguchi, vice-finance minister for international affairs, told reporters as he arrived for work.

Asked about market concern that the dollar was weak because of the US trade and fiscal deficits, Mizoguchi said the United States was aware of the problem and was trying to address it.

"It is superficial to focus only on the phenomena of the deficits,"Mizoguchi said.

"The US economy is strong relative to others, and the markets should reflect this."

(China Daily 01/16/2004 page12)