Bank of Japan Policy Board member Ryuzo Miyao said Wednesday the central bank is ready to take “appropriate” action as needed to support the economy amid worries that the yen will stay strong.

“An area of concern is that the strong yen is taking root,” Miyao, 47, said in a speech in Hakodate. If the dollar and euro remain weak against the yen on sovereign-debt worries, “concern about the hollowing-out of domestic industries will increase,” he said.

The yen’s appreciation to a post-World War II high last month threatens to derail the export-dependent recovery from the March 11 earthquake. Finance Minister Jun Azumi said Sunday he explained to his counterparts from the Group of Seven nations in Marseille, France, that Japan is prepared to take “bold actions” against speculative moves in the yen.

Miyao said the strong yen could hurt Japan’s growth potential if it leads to companies moving their operations abroad. The appreciation also has benefits such as lowering import costs and helping companies invest overseas, he said.

“It’s important to continue to act in an appropriate manner if it’s judged necessary,” on monetary policy, he said.

Japanese officials intervened in the currency market on Aug. 4 to stem the yen’s gains. The same day, the BOJ bolstered an asset-buying fund to ¥15 trillion from ¥10 trillion, while leaving its target interest rate near zero percent.

The intervention failed to stop the strengthening of the yen, which rose to a postwar record of 75.95 per dollar on Aug. 19. Concern that U.S. economic growth will slow and Europe’s debt crisis will deepen spurred buying of the yen as a haven.

The economy shrank at a 2.1 percent annual pace in the three months through June, the third straight quarter of contraction. Government data suggest that the global slowdown may weigh on Japan’s recovery, with industrial output and machinery orders both weaker than economists forecast. The Asian Development Bank on Wednesday cut its 2011 estimate for Japan’s economy to a 0.5 percent contraction from a previous estimate for a 1.5 percent expansion.

The March disaster caused companies to cut production and consumers to reduce spending amid electricity shortages and supply-chain interruptions.

Risks to the recovery include the possibility overseas demand will weaken as the recovery in U.S. and European economies slow, and rising electricity costs as the country moves away from nuclear energy, Miyao said. He also said the lengthening of deflationary expectations is a worry.

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