* Considering price hike in China
* China sales still strong, brisk demand to last next year (Adds president's comments, background, graphic)
By Nobuhiro Kubo and Kentaro Sugiyama
TOKYO, Sept 16 (Reuters) - Komatsu Ltd, the world's No.2 construction machinery maker, may hike prices of its excavators, dump trucks and other equipment as strength in the yen is pressuring profits, its chief executive said on Thursday.
Kunio Noji also said in an interview with Reuters its sales in China remain strong although there are worries the Chinese economy could slow down.
The yen weakened to around 85.60 yen to the dollar on Thursday after the Japanese government intervened in the currency market on Wednesday for the first time in six years, clawing the yen back from a 15-year high of 82.87 yen.
The lower rate is still too high, however, to persuade Komatsu, which based its annual earnings forecasts on an average of 89 yen to the dollar, to keep its prices flat. With many other Japanese companies having assumed a similar rate of around 90 yen, Japan's government may face renewed pressure for more intervention.
"I appreciated the government's move to lower the yen's value. But the yen is strong against all other currencies. That is tough for us," said Noji,63.
"An immediate measure we could take is to raise product prices. In China we are now looking at how we can raise prices when demand surges in the Chinese New Year," Noji added.
Komatsu is assuming a yuan rate of 13.1 yen for the business year to March.
The head of the Japanese automakers' lobby Toshiyuki Shiga told a news conference on Thursday he did not consider 85 yen per dollar a weak enough level for the Japanese currency, calling on authorities to keep taking decisive steps in the foreign exchange market.
Komatsu, which competes with U.S. giant Caterpillar Inc and Hitachi Construction, upgraded its full-year operating profit forecast by 14 percent to 179 billion yen ($2.09 billion) in July, citing strong sales in Asia and Latin America, as well as a pickup in demand in Japan and the United States.
Its current forecast is in line with a consensus from a survey of 18 analysts by Thomson Reuters I/B/E/S.
Markets have worried that China's economic growth could slow down due to the official campaign to rein in property prices and bank loans, but Noji said Komatsu's Chinese sales had remained strong and the brisk demand would last at least throughout the next year.
"Urbanisation is in progress in China's inland areas where roads, sewerage systems and railways are being made. The government will reportedly spend another 400 billion yuan ($59.36 billion) on development of the western region," said Noji.
China is the biggest market for Komatsu and the firm has a larger presence than Caterpillar there.
About 65,000 Komatsu's vehicles are spread across the vast country, each fitted with an antenna that via a satellite link tells Komatsu where it is and whether it is in use.
"Our machines in China are now operating about 200 hours per month. That is more than twice as long as in Europe, the U.S. and Japan and is not declining," said Noji.
Komatsu expects its construction machinery and mining equipment sales in China to grow 30.9 percent in the financial year ending March. ($1=6.738 Yuan; $1=85.75 Yen) (Reporting by Nobuhiro Kubo and Kentaro Sugiyama; Editing by Michael Watson)