* Says never favoured either weak yen or strong yen
* Important to stabilise currency value based on economy
* Vows to shift from reliance on exports to domestic demand (Recasts, adds quotes)
By Tetsushi Kajimoto
OSAKA, Japan, Oct 15 (Reuters) - Japanese Finance Minister Hirohisa Fujii defended his right to speak out on currencies on Thursday while dismissing the view that he favours a stronger yen.
The yen jumped against the dollar last month after Fujii, on the day he became minister, said a strong yen had advantages for the nation's economy and he opposed intervention in the market if currency moves were gradual.
"Some newspapers describe me as a rare finance minister who speaks out on currency policy. That's wrong," Fujii said on Thursday.
"It's the past finance ministers who didn't speak out on currency policy who were wrong."
After turbulence in currency markets following his remarks last month, Fujii has sought to tone down his comments.
He said he never explicitly called for a stronger currency and that the Finance Ministry could intervene if foreign exchange moves got out of hand.
"My remarks have caused a lot of misunderstanding," Fujii told reporters.
He said he had never favoured a weak yen or a strong yen for Japan's economy.
"That's something the business community should think about," he told a news conference after meeting with business leaders in Osaka, western Japan.
"Our political task is to stabilise the value of the currency. The basis for stability is the need for the currency's value to match the economy's strength. This must be ensured by politics."
He also said that countries must not compete to devalue their currency to help their exports.
"Currency dumping in 1930 ruined the world economy," Fujii said in the meeting with business leaders.
He also repeated his view that Japan should not rely too much on exports for economic growth and that the new Democratic Party-led government is striving to turn the economy into one led by domestic demand.
The dollar briefly dipped against the yen after Fujii's comments, but the impact was limited as the greenback remained above its intraday low of 89.27 yen.
On the effect of his previous comments, he said: "What I said at the G7 and G20 was that competitive devaluations were not good. I never said the yen should be this or that."
The Democratic Party has been critical of the policies of the previous government led by the Liberal Democratic Party (LDP), saying it catered too much to the corporate sector at the expense of ordinary people.
Japan's authorities under the LDP intervened heavily earlier in the decade to stop a rising yen from harming exports. But the authorities have not intervened since March 2004, the end of a 15-month long spree in which they sold 35 trillion yen ($391.3 billion) to shield a struggling economy. ($1=89.43 Yen) (Editing by Michael Watson)