Finance leaders from the Group of Seven industrial nations wound up their Saturday meeting in Washington with a communique saying exchange rates should reflect economic fundamentals. Conspicuously, they refrained from declaring that they shared Tokyo’s concern over a strong yen, a sentiment included in statements issued after G7 meetings in September and January.

It is noteworthy that the Saturday meeting marked the return to traditional lines, no longer singling out a particular currency.

Japan reaffirmed its commitment to continue its ultraeasy money policy, and the yen came under renewed upward pressure this week.

Given countermeasures hinted at by monetary authorities, however, an unchecked yen rise appears unlikely.

The G7 appears concerned about a weak euro as the euro-zone economy seems to be heading for growth of more than 2 percent this year and in 2001.

Despite the visible strength in the underlying euro-zone economy, the euro’s fall in value has continued unabated in recent months.

Still, the G7 statement stopped short of directly referring to the euro’s weakness, and European monetary authorities appear in no mood to come to the unit’s rescue.

Although the statement said the Japanese economy “has not yet achieved a secure recovery in private demand,” there is a virtual consensus in the marketplace that the economic recovery is solid.

The positive view on Japan’s economic prospects naturally is fueling expectations of a further rise in the yen.

The Bank of Japan’s latest quarterly “tankan” survey on business sentiment found that major manufacturers’ in-house arbitrage dollar-yen exchange rates averaged 104 yen last month, setting off speculation that the BOJ now finds little reason to try to keep the dollar from falling below 105 yen.

Japanese monetary authorities often tried to talk up the dollar in recent months, saying a premature rise in the yen’s value posed a serious threat to the nascent economic recovery at home.

The market is now trying to assess how far they would allow the currency to rise, and the yen could try to test 102 to the dollar in the near term.