TOKYO (Reuters) - Japanese Prime Minister Naoto Kan said Tokyo was ready to act again if the yen moved sharply, keeping traders on guard against further intervention as expectations of U.S. monetary easing weighed on the dollar.

Japan intervened in the currency market last week by selling yen for the first time in more than six years as its surge to a 15-year high against the dollar threatened to derail Japan's slowing economy and worsen deflation.
In an interview with the Financial Times published on Wednesday, Kan said currency intervention would be unavoidable if there were a drastic change in the yen exchange rate.
The comments coincided with the dollar's drop below 85 yen to its weakest level since last week's intervention, after the Federal Reserve signaled it was ready to stimulate the U.S. economy more.
Traders said the yen was still below levels that would trigger another intervention, but more yen selling could not be ruled out.
Kan, who is traveling to New York this week for a U.N. General Assembly meeting, said there was an agreement among G20 nations that overly rapid currency movements were undesirable, and that he would seek to defend Japan's action.
The BOJ also stands ready to ease policy further at its next rate review on October 4-5, although there is a debate within the bank on what exactly it should do next with its policy options limited, sources familiar with the bank's thinking said.