The dollar was confined to tight ranges of 105.43 to 105.79 yen, not far off a seven-week low. Its downside was supported by intervention fears while the topside was limited by expectations Japanese gross domestic product data, due on Friday, would show a clear economic recovery, dealers said."(Finance Minister Kiichi) Miyazawa's remarks had a psychological impact on the market, making operators cautious about selling the dollar aggressively below 105 yen," one Japanese trust bank dealer said.

"But the market will challenge the Bank of Japan and sell the dollar aggressively if the GDP figures show convincing strength in the Japanese economy," he said.

The yen's run to a seven-week high of 105.03 yen late on Wednesday was abruptly halted after Miyazawa indicated that 105 yen would be a strong support level.

Miyazawa said he thought the market was aware it would be difficult to push the dollar under 105 yen. His remarks were followed by more jawboning from senior Finance Ministry officials on Thursday.

Japanese Vice-Finance Minister for International Affairs Haruhiko Kuroda and his deputy Zembei Mizoguchi both took the opportunity to scare dealers, saying Japan would take appropriate action in the foreign exchange market if necessary. As of 0602 GMT, the dollar stood at 105.64/74 yen compared with 105.32 yen in the US market late on Wednesday. Japanese importers and trust banks were rumoured to be lining up bids around 105.20/30 yen.