WRAPUP 3-DPJ's Okada: Japan export-led growth has limits

(For more stories on Japan's Aug 30 election click [ID:nPOLJP])

* Japan opposition: export-led growth model reaching limits

* Shouldn't intervene on forex if moves match fundamentals

* China military spending a concern, transparency sought

* New survey shows opposition keeps lead before poll (Adds opinion poll in 6th paragraph)

By Linda Sieg and Hideyuki Sano

TOKYO, Aug 10 (Reuters) - Japan's export-led growth is reaching its limits and Tokyo should not intervene in markets to weaken the yen as long as currency moves match fundamentals, the No.2 executive in the main opposition party said on Monday.

Surveys show the decade-old Democratic Party of Japan has its best ever chance of ousting the Liberal Democratic Party (LDP) in an Aug. 30 election, ending more than half a century of almost unbroken rule by the business-friendly party. [ID:nT44020]

"What to do with currencies should be left to a new government," Katsuya Okada, now the Democrats' secretary general and tipped by some as a possible finance minister in its cabinet, said in an interview at a Thomson Reuters Newsmaker event.

"But I think trying to move currency rates artificially when they are in line with economic fundamentals could be undesirable in the long run," Okada said.

Many analysts expect the Democrats to avoid upsetting currency markets despite past rhetoric favouring a stronger yen. Japan intervened heavily in markets earlier in the decade to stop a rising yen from harming exports but has stayed out of markets for more than five years.

An opinion poll released on Monday showed the Democrats had widened their lead over the struggling LDP. Just over 34 percent of voters surveyed by Kyodo news agency on the weekend said they would vote for the main opposition party, while 13.3 percent chose the LDP. Kyodo said 38 percent were undecided.

To stimulate consumption at home, the Democrats have pledged to put more money in the hands of consumers by providing child allowances, eliminating highway tolls and making fuel cheaper. That marks a shift away from the long-ruling LDP's emphasis on steps to help companies. [ID:nT356653]

"Growth that relies on exports to the United States, in particular, clearly has its limits as the U.S. overconsumption is being corrected," Okada said. "For domestic demand-led growth, consumption has to be at the centre."

FISCAL REFORM TARGET

Big business has complained that an ambitious Democrat target to cut greenhouse gas emissions by 25 percent below 1990 levels by 2020 and by more than 60 percent by 2050 could hurt the economy, while a proposed ban on temporary workers in factories could force firms to shift production overseas.