Uncertainty over Japan's economic outlook is "especially high" right now, a senior central bank official said Thursday."The BOJ will act in a flexible manner," Bank of Japan Deputy Gov. Kiyohiko Nishimura also said during a parliamentary session. He said global financial markets are also unstable. "They are now in a process of risk revaluation," Nishimura said. "That won't finish soon, but we need to ensure that it is done in an orderly manner."

Meanwhile, Finance Minister Fukushiro Nukaga voiced concern about what he called the yen's "excessive" rise last week.

On March 17, the dollar sank to its lowest levels in 12 1/2 years, falling below 96 yen as the Federal Reserve's rate cut failed to calm market fears about more U.S. bank write-downs. In Tokyo trading Thursday afternoon, it was trading at 98.92 yen.



The weak dollar undercuts exporters' earnings when converted back to yen.

Nukaga would not say whether Japan is considering market intervention to weaken the currency.

"About foreign-exchange market intervention, I would like to refrain from commenting on the issue because doing so could bring on unexpected consequences," he told a parliamentary committee.

Another central bank official said she hasn't changed her views on monetary policy, but warned that the nation's economy could slow down further than expected.

"When uncertainties are growing, it's important for us to take steps gradually while examining the situation," BOJ board member Miyako Suda told business leaders in Miyazaki, in southern Japan.

Japan's key interest rate is at 0.5 percent, the lowest among major industrialized nations.

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