Kan's comments affect yen

TOKYO, Jan. 7 (UPI) -- Japan's key Nikkei 225 stock index was trading higher Friday as the yen weakened on comments by the country's new Finance Minister Naoto Kan.

The U.S. dollar had risen to about 93 yen in early trading in response to Kan's remarks the previous day that he favored a weaker currency. A lower yen helps boost exports, which is critical for Japan's export-dependent economy.

Kan, currently the deputy prime minister, will also hold the finance minister portfolio, succeeding Hirohisa Fujii. In his first public comment after taking over the job Thursday, Kan said many Japanese companies supported a weaker yen, around 95 to the U.S. dollar, the Financial Times reported.

"Such a stance seems to be appropriate for Japan, considering the weak growth prospects, particularly in the first half of 2010, which will see less economic stimulus measures and, therefore, a strong need for exports to push up the whole economy," the Times quoted Paul Robinson at Barclays Capital as saying.

Kan's comments indicated the Bank of Japan, the country's central bank, may need to ease monetary policy even more if the yen were to strengthen.

"I will work with the Bank of Japan to get the yen to appropriate levels while paying attention to the effects on the economy that currency can cause," China's state-run Xinhua news agency quoted Kan as saying.

The Times reported Japan has not intervened in the foreign exchange market since 2004. An earlier rise in the yen amid Japan's recovery from its worst post-World War II recession had badly hit exports.