Japan's finance minister on Friday ratcheted up warnings of currency market intervention to tame the strong yen, after the dollar tumbled in the wake of the Federal Reserve's bond-buying plan.
Jun Azumi made the comments to reporters in Tokyo after the dollar hit a seven-month trough of 77.13 yen at one point in New York trade on Thursday.
"This sort of movement is something I cannot overlook," Azumi said.
"I will not rule out any measures and I will take decisive steps when it is deemed necessary. This is the stance I will continue to maintain."
For months, Japanese officials have stepped up warnings they will step into forex markets in an attempt to verbally weaken the unit.
While the yen has remained strong despite those warnings, Friday's comments seemed to have some effect as the dollar rose to 77.59 yen in Tokyo Friday, from 77.48 late Thursday in New York.
The U.S. currency fell after the Fed unveiled a plan to breathe life into the economy through a $40 billion-a-month asset purchase plan that will see a flood of dollars hit markets.
While Azumi welcomed the U.S. drive to stabilise the world's biggest economy, he warned that the yen's strength was hurting Japan's own stuttering recovery as its exporters were feeling the pinch as their goods become more expensive overseas.
"We can fully feel (the Fed's) resolve to buoy the economy. A recovery of the U.S. economy is good for the world economy," he said.
But the Japanese unit's value was "one-sided" and out of step with the nation's economic reality.
The country's economic picture has become increasingly gloomy in recent months due to the European debt crisis, a global slowdown and the yen's strength.
Officials have intervened in forex markets four times since September 2010, but on each occasion the early boost to the dollar has slowly ebbed.
Despite Japan's huge public debt and sagging economy, traders have increasingly viewed the yen as a safe-haven at a time of turmoil in Europe and an uncertain U.S. economic picture.
The unit hit record highs around the 75 level against the dollar late last year and remains strong.
Reports that the central bank carried out a rate check with several banks during New York trading hours, the first since early June, was the strongest signal yet that Japanese officials would step into forex markets.
Under pressure over the state of the world's third-biggest economy, the Bank of Japan is expected to expand its 70-trillion-yen ($900-billion) asset purchase programme by about 10 trillion yen at a meeting in late October.
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