REFILE-UPDATE 1-Japan Hatoyama:Asian community won't exclude dlr

(For more on Japan's new government click [ID:nPOLJP])

* Hatoyama treads carefully on role of dollar

* Yen jumps to 7-month high on new Finmin comments

By Stanley White and Hideyuki Sano

TOKYO, Sept 16 Japanese Prime Minister Yukio Hatoyama said on Wednesday his vision for an Asian community didn't mean he wanted to diminish the role of the dollar or exclude the influence of the United States from the region.

Hatoyama's comments may do little to ease market jitters about Japan's new government and its stance on the dollar after remarks from newly appointed Finance Minister Hirohisa Fujii caused the yen to jump to a seven-month high against the greenback.

"I think (a community) is the right direction to consider in Asia, in East Asia in particular, over the medium- to long-term," Hatoyama told reporters after his Democratic Party took control of the government.

"That is not aimed at excluding the dollar or the United States. Rather, I envision an Asian-Pacific community beyond that."

The dollar slid to 90.12 yen, the lowest since February, after Fujii said he didn't think the yen's recent gains against the dollar were rapid and that a strong yen could benefit Japan. It was later trading around 90.35 yen. [ID:nT286998]

Other Democratic Party lawmakers have also made comments suggesting they would rather let the yen strengthen to benefit households and that Japan should generate more returns from its $1 trillion in currency reserves, the bulk of which are believed to be held in dollars.

Hatoyama also said on Wednesday that his new government can secure 7 trillion yen ($77 billion) in 2010/11 to carry out his party's policies and that it was important to relieve the burden on households as the economic outlook is unclear.

"We would like to carry out policies that will stimulate households so the Japanese people can have hopes for the future, such as child benefits and cuts in gasoline tax," he said.

"That raises question about how to finance those policies... I think we can say that securing enough funds is in sight. We will have enough funds at least for the first (fiscal) year."

Hatoyama, whose Democratic Party of Japan (DPJ) trounced the long-ruling Liberal Democratic Party in an election last month, faces pressure to make good on campaign promises to focus spending on consumers, cut waste and reduce bureaucrat control over policy. (Reporting by Stanley White and Hideyuki Sano)