TEHRAN Japanese Finance Minister Kiichi Miyazawa said Tuesday he sees no prospect of a collapse in the Japanese government bond market following a warning from a former top Finance Ministry official.

According to an AFP report, former vice finance minister Eisuke Sakakibara -- previously known as Mr. Yen for his influence on the Japanese currency -- said at the weekend Japan could face a financial crisis triggered by a collapse of the government bond market between June and August this year.

"There is a high possibility that a financial crisis will surface sometime between June and August, especially on the Japanese government bond market, and stock prices may also fall below 12,000 points again," Sakakibara told a local television station at the weekend.

However, Miyazawa denied there was any likelihood of a collapse in the bond market.

"I am not concerned about the government bond market because the market currently shows no signs of trouble," he told a regular press briefing.

"Corporate demand for funds is still low and stock prices are not high. This means money will have to go to the bond market, so there is no worry," Miyazawa said.

Sakakibara said a crisis could be caused by problems faced by the government in implementing its recently announced economic stimulus package and a serious economic downturn in the U.S.

Recently, there has been speculation that the Bush administration might tolerate a wobbly yen as a means of jump-starting the Japanese economy through increased exports.

The U.S. economy would in principle stand to gain from stronger growth in Japan. But in reality a surging dollar would hamper sales of U.S. goods abroad.

In a bid to squelch speculation Miyazawa has denied the existence of any exchange rate deal with Washington.

"It is impossible for Japan and the United States to control the dollar-yen rate," Miyazawa said.

Earlier this month, the government announced a package which included strict time limits for banks to write off bad debts and the setting up of a body to buy part of banks' vast shareholdings in other companies.

Sakakibara said a crash in the bond market could be triggered by fears of future economic instability leading to a sudden and unexpected move by investors to stop buying bonds.

"Indeed, some foreign investors are (already) beginning to sell Japanese government bonds," he said.