In a sign that Japan's patience might at last be wearing thin with constant world criticism of its economic policies, foreign ministry spokesman Sadaaki Numata told reporters: "To be frank, some of the observations made can be considered somewhat simplified if not simplistic. "Is there a deliberate policy to bring down the value ofthe yen? Definitely not," he said. "There is no truth in a deliberate cheap yen theory," he added. He was responding to questions about the Chinese foreign ministry's comments on Thursday that Japan must assume more responsibility in the Asian economic crisis and that China wants Japan to move decisively to halt the yen's slide.

"We have made clear that we see it of vital importance for us, our Asian neighbours and the world economy as whole that Japan attain a strong, stable yen,stabilise foreign exchange markets and restore the banking system to health," Numata said. Japan and the United States jointly intervened to shore up the sinking yen on June 17, and Numata hinted that more coordinated intervention could be in store. "We will take firm action in cooperation with other countries with respect to excessive falls in the value of the yen," Numata said. As he spoke, the Japanese currency seesawed at around 143 to the dollar, above the level where Tokyo and Washington intervened last week. Markets are waiting for more evidence that Japan means business in sorting out its bad loan problem, the largest single drag on the economy. Japanese officials are working towards a July 8 deadline to come up with a formula for dealing with the crushing debts.

China, on the eve of US president Bill Clinton's visit, made political hay out of Beijing's decision not to devalue its currency, the yuan, in the face of a weakening yen. If the yuan were devalued, market players feared, it would triggera dangerous round of competitive devaluations of Asian currencies already hard hit in the economic turmoil.

Numata took issue with the theory that the weak yen was the root of Asia's problems, saying that with the exception of South Korea and Taiwan, there was very little competitive overlap between Japan and its Asian trading partners. Citing China, this lack of overlap meant that a falling yen was unlikely to affect China's exports to third country markets, Numata said. "I doubt if we can draw the conclusion that China will be compelled to devalue the renminbi (yuan) because of a fall in the yen," he said. Asked whether recent calls from China for Japan to work harder to put Asia's economy back on track could be characterised as "megaphone diplomacy," Numata said Japan saw them as simple expressions of China's expectations that Japan will grapple with its economic difficulties.