BOJ's Fukui says yen's appreciation potentially 'big concern': FT.

LONDON, Nov. 22 Kyodo

Bank of Japan Governor Toshihiko Fukui said in an interview with the Financial Times published Monday the yen's recent surge against the dollar has the potential to ''become a big concern.''

Fukui indicated the firmer yen could be destabilizing and said he was puzzled at the dollar's rapid fall, given that the U.S. economy was stronger than that of Europe or Japan, according to the daily.

''From the cyclical perspective, there is no reason the dollar should be declining,'' Fukui was quoted as saying. His comments suggest the United States should reduce its huge trade and budget deficits, and not rely on the dollar's depreciation to write off its debts.

Since last Friday, the yen has briefly hit the highest rate against the dollar in the 102 range for the first time in four years and eight months, on comments by U.S. Federal Board Chairman Alan Greenspan that the dollar could slide further amid U.S. deficit woes.

The BOJ governor presented an optimistic view about the Japanese recovery, saying the economy should return to a ''sustainable growth track'' next year despite the current ''temporary pause.''

''I am very confident that the current recovery phase is qualitatively different from the previous two recovery episodes in the 1990s because restructuring by the private sector has been progressing very rapidly and innovation by the corporate sector is very visible,'' the Financial Times quoted Fukui as saying.