(For more stories on the Japanese economy, click)
By Yoko Kubota and Linda Sieg
TOKYO, Oct 20 (Reuters) - The Group of 20 should share a common view on the need to restrain rapid and extreme currency moves, Japanese Deputy Chief Cabinet Secretary Tetsuro Fukuyama said on Wednesday, days ahead of a G20 finance ministers' meeting.
Strains over exchange rates are expected to dominate a meeting of G20 finance ministers in South Korea starting on Friday. Seoul also hosts a G20 leaders summit in November.
"In the competition to weaken currencies, what we need to watch out for is the tendency for countries to become protectionist," Fukuyama told Reuters in an interview.
"Without falling into protectionism, we should share the view that rapid and extreme (currency) moves should be restrained. I think that the debate at the G20 should start from trying to share that common view," he said.
"Based on that, we would like to discuss what sort of (new) framework there should be."
Fukuyama said there was no change in Japan's position on currency intervention as stated by Prime Minister Naoto Kan, who has said Tokyo would take decisive moves if needed.
Japan intervened in the foreign exchange market on Sept. 15 to try to curb a rise in the yen that is threatening the country's economy, but the Japanese currency is still close to a 15-year high below 81 yen.
Tokyo has insisted, however, that its currency intervention is qualitatively different from that of South Korea, which has stepped in repeatedly to try to cap a rise in the won.
Fukuyama is one of two politicians holding the post of deputy chief cabinet secretary under Chief Cabinet Secretary Yoshito Sengoku, who is the de facto No. 2 in Kan's government.
EXTRA BUDGET, CHINA TIES
Fukuyama also shrugged off concerns that a planned 5.05 trillion yen ($62 billion) extra budget the government wants to enact to keep the economy afloat will stall in a divided parliament, where opposition backing is needed to pass bills.
"In the current economic situation ... I don't think the opposition parties will refuse to take part in debate on the extra budget or act negatively about enacting it," he said.
Japan's government cut its view on the economy on Tuesday, describing the economic situation as being at a standstill in a monthly economic report.
Commenting on strained ties with China, Fukuyama stressed that Asia's top two economies were mutually interdependent and said it behooved both sides to try to get along and repeated Tokyo's call for China, now overtaking Japan as the world's second-biggest economy, to act responsibly as a global power.
"The two governments need to work to create a win-win relationship," Fukuyama said.
"Of course, China is a major power now and we need to urge it to fulfil its responsibility as such."
Sino-Japanese ties deteriorated sharply last month after Japan detained a Chinese trawler captain whose boat collided with Japanese patrol ships near disputed and uninhabited isles in the East China Sea, called Senkaku in Japan and Diaoyu in China.
The two governments are trying to arrange a formal meeting between their leaders at the end of this month on the sidelines of a regional summit in Vietnam. (Additional reporting by Yuko Yoshikawa and Risa Maeda; Editing by Joseph Radford)