Japan Trade Minister: 110 Yen to Dollar OK

"A yen exchange rate somewhere in the vicinity of 110 yen to the dollar should be an appropriate range," Minister of Economy, Trade and Industry Akira Amari told Dow Jones Newswires during a visit to Singapore.

"It would be my personal sense that reaching 100 yen to the dollar within one year may be a little bit quick," he said.

The Finance Ministry, not Amari's trade ministry, controls Japan's currency policy.

The dollar fell to a two-year low of 108.89 yen Wednesday, the lowest since Sept. 5, 2005. It later rebounded to 109.21 yen at 4:50 p.m. Tokyo time (0750 GMT).

Amari said a stronger yen would erode profit margins among Japanese exporters but a gradual rise in the currency would not cause an excessive burden.

"A gradual appreciation of the yen reflecting the fundamentals of the Japanese economy would not have a negative effect," he said. "The worst that could happen ... is for exchange rates to go through wild fluctuations."