TOKYO Japan's finance minister on Friday gave a green light for yen bears to charge ahead, saying a weak yen should help exporters and reinforcing speculation that the government would endorse a weak yen to spur the economy.

"We can leave the yen's moves to the market," Finance Minister Kiichi Miyazawa told a regular news conference as the yen touched a 10-month low against the euro and a 16-month low against the dollar.

His remarks sparked further losses in the Japanese currency, helping drive it to a low of 111.77 against the euro and 116.90 against the dollar in Tokyo.

Kenneth Landon, senior currency strategist at Deutsche Bank in Tokyo, said: "It's a clear signal that Japanese authorities are pretty much comfortable with what's going on. If there was a concern internally (about yen weakness), it would have been the time to express it. But they went the opposite direction."

"They may not be out to intentionally weaken the yen further, but they are not going to fight it either."

Asked whether exporters would benefit from the yen's decline, Miyazawa said: "While the yen's weakness will help Japanese exporters in the short run, we don't know whether this trend will take hold."

"Now we're seeing a bit of turbulence (after U.S. interest rate cuts) and watching to see where they (foreign exchange rates) settle ... We can leave the yen's movements alone for a while," he said.

Analysts said a weak yen policy may serve the Japanese government just as the economic recovery seemed to be sputtering.

With the ballooning fiscal deficit and interest rates close to zero, the government has little options left to bolster the world's number two economy.

"It's the least costly form of economic stimulus and convenient for everyone," said Takehiro Sato, economist at Morgan Stanley Dean Witter in Tokyo.

Tokyo stocks closed firmer for the first time in five sessions on Friday as the yen's continuing weakness prompted investors to snap up major exporters such as Sony Corp. and Toyota Motor Corp.

A chase for issues that will benefit from the weak yen -- that's what today's market is all about," said Koji Hayakawa, equities general manager at Ichiyoshi Securities.

(Reuter)