TOKYO The dollar wavered against the yen in Monday morning trade, gaining some support from fears of intervention after taking a battering offshore at the end of last week in the wake of the terror attacks in the United States.

The greenback was trading at around 117.10 against the yen in late morning, only just above an offshore low of 116.90, its lowest point in nearly seven months.

Against the euro, the dollar was bid around $0.9240 just above a seven-month low of $0.9248 reached on Friday. The single currency remained relatively calm at 108.28 against the yen.

Amid jitters over the likely U.S. response to the devastating attacks, the Swiss franc made the most of its safe haven status, the neutral country's currency marking a new eight-month high on the dollar around 1.6190

Trade remained thin in Tokyo, with speculative deals still dampened by the possibility of dollar settlement failures following the devastation in New York's Financial Center.

Weighing heavily on traders' minds were stronger than usual warnings from Japanese Finance Minister Masajuro Shiokawa, who is eager to prevent a dollar slide that could hurt Japan's already ailing exporters.

Last week's rise in the yen was already damaging shares in companies like Sony Corp. and Toyota Motor Corp. and the Nikkei average stood down 5.5 percent in late morning.

On Sunday Shiokawa told a news conference in the western city of Kobe that the Ministry of Finance (MOF) was ready to take appropriate action in the foreign exchange market if necessary.

*** Intervention Fears ****

In response to a question about the dollar's fall following the terror attacks, Shiokawa said: "We want to take appropriate steps if needed. The ministry has been running simulations and is preparing for the event that it may be necessary."

However, he added he would have to watch movements in the market a while longer before deciding.

His comments echoed those of Japan's top financial diplomat, Haruhiko Kuroda, who told Reuters on Friday that the ministry would take appropriate steps on currencies, saying the latest dollar/yen movements did not reflect fundamentals.

Dealers and analysts say much hangs on equities movements when New York exchanges resume trading later in the day after a four-day hiatus.

"There has been some talk of buying back, but I think that would be difficult to justify in the face of weakening corporate performance, so I think equities will fall," said Koji Fukaya, chief forex analyst at Bank of Tokyo-Mitsubishi.

"The question is how far they tumble. I expect a fall of around seven or eight percent, and I think most of that has already been factored in by the currency markets," he added.

The past few weeks have seen rumours that the Japanese government might step into the market around the 118.30 mark.

With this level now in the rear-view mirror, Bank of Tokyo-Mitsubishi's Fukaya said he expected the Japanese side to try to defend a level somewhere between 115 and 117 yen.