Sept. 28 (Bloomberg) -- Japanese Finance Minister Hirohisa Fujii said people are wrong to think that he’s in favor of a stronger yen.

The currency pared its gains from an eight-month high after Fujii said today that foreign-exchange movements “have been somewhat one-sided recently.” Since coming to office this month, he has said he doesn’t support a “weak yen” and questioned “the idea of easy intervention,” spurring speculation the government won’t step into the currency market.

The yen has risen 19 percent in the past year, making Japanese products shipped abroad more expensive and eroding the value of repatriated profits. The Democratic Party of Japan, which won power for the first time last month, has said a stronger currency may benefit households by making imported goods cheaper.

Speaking at a forum co-hosted by Bloomberg, Fujii said he “never said I will leave the yen to strengthen” and that he didn’t necessarily accept gains in the currency. While declining to comment on foreign-exchange intervention, he said countries shouldn’t compete to weaken currencies and movements in foreign-exchange rates should be “stable.”

The yen traded at 89.37 per dollar at 3:16 p.m. in Tokyo from 89.64 in New York on Sept. 25. Earlier today the currency touched 88.24, the strongest level since Jan. 23. The gains helped to send the Nikkei 225 Stock Average 2.5 percent lower.

Support for Households

Fujii stressed that households should underpin Japan’s economic growth rather than exporters.

“The days of high growth driven by exports and big companies are over,” Fujii said at the forum, which was also hosted by the Sankei newspaper. “We want to focus on policies that will foster spending by consumers and domestic demand. Our policies, including childcare handouts, aren’t a free-for- all.”

The government plans to reallocate some funds from the previous administration’s supplementary budget to pay for the childcare support plan. Further spending may be needed should the economy deteriorate, Fujii said.

To contact the reporter on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net

Last Updated: September 28, 2009 02:20 EDT