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Japan cooperating with U.S. to stabilize forex-MOF
NEW YORK, June 23 (Reuter) - Japan will continue to cooperate with the United States to stabilize foreign exchange rates, Takatoshi Kato, Japan's vice finance minister for international affairs, said on Monday in a statement.

Kato was seeking to clarify comments by Prime Minister Ryutaro Hashimoto about U.S. government bonds, made in a question-and-answer session at Columbia University, where Hashimoto gave a speech earlier on Monday.

``In the past, we were tempted to sell U.S. treasuries and buy gold when I was involved in car negotiations with Mickey Kantor and when the U.S. was not interested in the dollar, a world key currency, when it was fluctuating wildly,'' Hashimoto said.

Hashimoto added, ``So please the United States cooperate with us to stable exchange rates in order to prevent us from being tempted to sell U.S. Treasuries and buy gold.''

Kato said in the English statement, ``The question posed was whether it would be profitable for the government of Japan and Japanese investors to continue to hold U.S. Treasury bills.''

``In response to this question, the Prime Minister stated that even though some mentions were made of these temptations in the past, Japan never sold Treasury Bonds for profits because of the overriding importance we attach to the Japan-U.S. relationship and to the stability of the currency market.''

Kato said Hashimoto instructed him to make the following comments:

The Prime Minister regrets that his intention was not accurately conveyed. The Prime Minister's intention is to maintain the consistent policy of the Government of Japan, which has been implemented, bearing in mind the good relations between Japan and the U.S. The Japanese authorities will continue to cooperate with the U.S with a view to maintaining stable foreign exchange markets.

U.S. stocks ended sharply lower on Monday after Hashimoto's comments triggered a wave of profit-taking.

The Dow industrials finished 192 points, or 2.5 percent lower at 7604. It was the second-largest single-day point drop in Dow history, trailing only the 508-point Black Monday market crash of October 19, 1987.