UPDATE 3-Japan finmin makes rare remark on intervention level

* Finmin: Decided to intervene in Oct as dlr hit 75.63 yen

* Won't hesitate to act against FX speculation -Azumi

* Sees current yen levels not reflecting econ fundamentals

* Dlr pulls away from record low vs yen

By Tetsushi Kajimoto and Kaori Kaneko

TOKYO, Feb 10 (Reuters) - Japanese Finance Minister Jun Azumi said on Friday that he had decided to intervene to weaken the yen last year when it hit 75.63 yen against the dollar, making a rare reference to a currency level that prompted authorities to take action.

His remarks before parliament stunned market players as policymakers usually refrain from discussing specific levels to avoid giving markets levels that they can test and to keep them guessing about triggers for intervention.

The minister said he had instructed his staff in October to intervene when the dollar hit 75.63 yen as the level was judged "perilous" to the Japanese economy and stopped the intervention at 78.20 yen early in November.

"I think the interventions had a certain impact on the market as the yen weakened nearly three yen from a critical condition of 75 yen and it stayed between around 77-78 yen till the end of last year," Azumi told a lower house budget committee.

A finance ministry official later said that Azumi had corrected his remarks, quoting him as saying that he had not been referring to specific rates but simply reading numbers off a board that an opposition lawmaker was showing him during the parliamentary debate.

Azumi had made the decision about intervention taking into account currency moves up to the day preceding the action, the official added.

Tomoko Fujii, FX strategist at Bank of America Merrill Lynch in Tokyo, called the remarks about the yen levels surprising.

"I think there haven't been such comments (on specific intervention levels) in the past as they would affect intervention strategy," she said.

"It could give hints to market players for their trading strategy and could invite unnecessary speculation that Japan does not need the yen to weaken beyond 78.20 yen."

READY TO ACT SOLO

Azumi tried to keep an intervention threat alive on Friday even as the yen pulled away from recent highs, saying the exchange rate remained out of synch with economic reality and repeating he was ready to counter excessive speculation.

His remarks that the current yen levels were not reflecting the economy's fundamentals underlined authorities' worry that a persistently strong yen could hurt an export-reliant economy and its recovery from last year's deadly earthquake and tsunami.

"I won't hesitate to intervene when speculative moves drive fluctuations in the exchange rate," Azumi told the lower house budget committee where lawmakers called for steps against a strong yen and persistent deflation. "I'll keep this stance and be ready to conduct solo intervention."

The dollar last traded at 77.63 yen, pulling away from its record low of 75.31 yen hit on Oct. 31, when Japan intervened heavily to protect exporters and recent lows around 76 yen.

Japan spent a record 8 trillion yen ($103.47 billion) in unilateral intervention on Oct. 31, and another 1 trillion yen in early November on undeclared forays into the currency market.

The U.S. Treasury criticised the solo interventions in a report last year, saying markets were not moving in a disorderly manner. Other Group of Seven countries also have taken a dim view of solo intervention, which made some analysts conclude that Japan could be more hesitant to intervene repeatedly on its own this year.

"Japan needs to explain its position against a strong yen to the global society and make efforts to seek joint intervention. But it would be difficult to make that happen, given the current international situation," Azumi said.

He said Japanese authorities were frequently exchanging opinions with their U.S. counterparts on the issue.

In intervening on Oct. 31, Japanese authorities said they needed to act against speculative market moves and that they would continue to act until they were satisfied.

The dollar has stayed above the record low since then.