Jan. 27 (Bloomberg) -- The yen rose for a fifth day in six against the dollar in Asia after Finance Minister Sadakazu Tanigaki said Japan's currency sales are not aimed at keeping the yen at a specific level.

``The only quibble is over the pace of the yen's appreciation, not the direction,'' said Peter Clay, currency strategist in Sydney at ABN Amro Holding NV.

Japan's currency has risen 11 percent over the past year as investors poured money into the country, prompting its central bank to sell record amounts of yen. The currency also gained after a report yesterday showed Japan's exports rose to a record last year, a sign the world's second-largest economy is recovering after three recessions since 1991.

The yen strengthened to 106.22 per dollar at 1:51 p.m. in Tokyo from 106.38 late yesterday in New York, according to EBS prices. It also gained to 132.33 per euro from 132.55.

The currency also rose on speculation Japan will scale back yen sales as European officials increase their calls to let the currency appreciate. Finance ministers from the Group of Seven nations will meet next week in Florida.

Japan sold 20.1 trillion yen ($189.3 billion) last year, limiting the yen's advance to almost half of the euro's 20 percent rise against the dollar. European officials including German Deputy Finance Minister Caio Koch-Weser this month criticized yen sales as shifting too much of the burden for letting the dollar weaken onto Europe.

`Japan's Turn'

``Europeans think it's surely Japan's turn to take the brunt'' of a weakening dollar, said Xinyi Lu, chief strategist at UFJ Bank Ltd. in Tokyo, a unit of Japan's fourth-largest lender. The yen may gain 102 by June 30, he said.

The yen has fluctuated less in the past month against the dollar than other currencies including the euro, the British pound and the Swiss franc. A measure of volatility, or swings in price, for the yen was at 5.5 percent for the past 30 days, compared with 11.4 percent for the euro and the pound and 12.3 percent for the Swiss franc.

``The comments from Japan to restrict, not halt, the yen's advance are as strong as ever,'' ABN Amro's Clay said.

The yen also strengthened after C. Fred Bergsten, head of the Institute for International Economics in Washington, said the G-7 would engineer a rise in Asian currencies without bringing about a dollar free fall, according to Meg Browne, a currency strategist in New York at HSBC Bank USA Inc.

Stocks, Interest Rates

Japan's Nikkei 225 Stock Average has gained almost 3 percent this year, adding to a 24 percent gain in 2003 on optimism Japan's economy will extend its recovery.

Overseas investors have been net buyers of Japanese stocks for the nine months through December, according to Ministry of Finance data.

Japan's economy is improving, heads of the finance ministry's regional bureaus said. Nine of 11 bureaus raised their quarterly assessments of their region's economies, according to a report submitted to the chiefs' quarterly meeting in Tokyo.

The dollar has dropped in part because the U.S. isn't expected to change its overnight interest target rate at a four- decade low of 1 percent anytime soon.

Members of the Federal Open Market Committee, which sets the level of interest rates, will probably maintain the benchmark overnight lending rate when a two-day policy meeting ends tomorrow, according to all 85 economists surveyed by Bloomberg News.

European Voices

The euro may gain versus the dollar on speculation the U.S. won't heed European calls to address the 12-nation currency's yearlong, 15 percent advance at the G-7 meeting.

Treasury Secretary John Snow yesterday said the need for more global growth will top the agenda. French Finance Minister Francis Mer said yesterday Europe must push the U.S. and Japan to counter the rise of the euro, which gained this month to a record.

Snow's comment ``suggests the meeting won't lead to any reversal in the euro's advance,'' said Junya Tanase, a currency analyst in Tokyo at J.P. Chase & Co., the second-largest U.S. bank by assets. As long U.S. policy makers are aloof, ``the dollar's drop will be intact.''

The euro was at $1.2464 compared with $1.2460 late yesterday in New York. The euro may gain to $1.4 by Sept. 30, Tanase said.

The euro's 3.4 percent decline from a record $1.2899 on Jan. 12 may also be reducing pressure on European officials to slow the currency's appreciation.

Any gain in the euro against the dollar may prompt more European officials to warn against ``excessive'' moves.

European Central Bank President Jean-Claude Trichet said in an interview with Spain's ABC newspaper that inflation will slow to less than the bank's target of 2 percent, spurring speculation the ECB will cut its benchmark interest rate.

Europe ``is less tolerant of the euro's strength than it was,'' said Michael Jansen, a currency strategist in Sydney at National Australia Bank Ltd., Asia's biggest bank outside Japan by assets. ``With the G-7 coming soon, a lot of people are taking money off the table'' reducing bets on the euro's gains.

-- Taizo Hirose and John Brinsley in the Tokyo newsroom (813) 3201-7483 or hirose2@bloomberg.net, with Yumi Kuramitsu in Hong Kong. Editor: Goodman, Grose-Hodge, Krumholz, Hendry, Goodman

NI JAPAN

Last Updated: January 26, 2004 23:51 EST