UPDATE 1-Japan finmin: Excessive yen strength being corrected

Thu Jan 3, 2013 11:30am EST

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NAYPYITAW, Myanmar Jan 3 (Reuters) - Japanese Finance Minister Taro Aso said on Thursday that the yen had begun to weaken since the start of the year as concerns over the U.S. budget standoff have eased.

"Excessive yen strength is being corrected after risks related to the U.S. 'fiscal cliff' have subsided around the New Year period," Aso told reporters while on a visit to Myanmar.

"It's important that the currency doesn't move up and down rapidly, but in a steady way," he added.

Aso, who was visiting Myanmar to reaffirm Japan's intention to cancel debt and help develop a big industrial zone there, also kept up the pressure on the Bank of Japan (BOJ) to help get the world's third-largest economy out of deflation.

"It's our utmost priority to fight deflation, and we will cooperate with the BOJ to achieve this goal," he said.

Japanese Prime Minister Shinzo Abe's new government is pursuing a policy mix of aggressive monetary easing and heavy fiscal spending to beat deflation and weaken the yen. It has called on the BOJ to adopt a 2 percent inflation target - double its current goal. (Reporting by Antoni Slodkowski; Editing by Hugh Lawson)

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