* Igarashi: Intl cooperation needed for appropriate FX rates
* Wants U.S. to show tolerance on currency issues
* Japan's FX intervention different in nature from China's (Adds quotes, details)
By Tetsushi Kajimoto
TOKYO, Oct 8 (Reuters) - The Group of Seven rich nations must make a firm commitment to avoiding a race among nations to devalue their currencies, Japan's vice finance minister said on Friday.
Fumihiko Igarashi, who is in charge of international affairs at the ministry, said in an interview on the eve of a G7 meeting that global cooperation would be needed to bring exchange rates into appropriate ranges, while competitive devaluations would do no good for the world economy and would only benefit speculators.
"A currency (devaluation) race would be unstoppable ... Each country must show a spirit of cooperation so that (currency rates) will fall into an appropriate range that reflects their actual strength," he said.
Igarashi said he hoped the United States, as the holder of the key global currency, would show a certain tolerance on currency issues, which he said were connected to Washington's desire to restore its economy with the help of exports.
"So far the U.S. has not protested against Japan's September intervention or criticised it, and I appreciate their attitude," he said.
"We'll continue to try to gain their understanding towards our stance that Japan is not thinking solely about its own interests. It would be problematic for us if their stance was that (our currency intervention) should stop after one round."
SEEKING UNDERSTANDING
Tokyo intervened in the currency market for the first time in six years on Sept. 15, as the yen's steady rise against the dollar has threatened to derail Japan's export-reliant recovery from its worst recession in decades.
The move weakened the yen temporarily but the Japanese currency hit a fresh 15-year high this week on the prospect of further U.S. monetary easing to prop up the world's No.1 economy.
Japan will continue to take decisive steps against rapid yen rises and speculative moves, Igarashi said, adding that Japan would make efforts to seek understanding from other countries for its actions, which he said were not motivated by any desire to give Japanese exporters special advantages.
But solo intervention by Japan would have only a limited impact so broad policy measures and international cooperation are needed to cope with the yen rise, he said.
Some market players said it may be difficult for Japan to intervene at a time when the G7 countries are seeking cooperation to avoid a currency devaluation war and China is under pressure to make its yuan more flexible.
Igarashi, one of the finance minister's two deputies, said Japan's currency policy was different in nature from China's, and he hoped that other countries would understand that.
China should make greater efforts on yuan reform to gain understanding from other countries, he added.
"I understand that China is continuously intervening to maintain a relatively advantageous position for the yuan, but we are not," he said.
"Our stance is to respond to excessive and rapid changes while paying heed to the health of the markets." (Additional reporting by Sumio Ito; Editing by Edmund Klamann)