* Japan suspected of intervening for 2nd time; doubts arise
* Yen rise comes as Fed QE expectations hurt the dollar
* BOJ knocks down rumours of governor's resignation
* Dollar drifts lower after suspected intervention
By Masayuki Kitano and Yoshiko Mori
TOKYO, Sept 24 (Reuters) - A sudden slide in the yen against the dollar on Friday stirred suspicions Japanese authorities intervened for a second time this month to try to prevent the currency's strength from worsening a faltering recovery.
Traders in Tokyo reckoned a sharp yen drop was likely due to intervention, though the fall happened at levels where authorities were not expected to act.
Some blamed corporate orders for triggering the move and others a rumour -- later denied -- that Bank of Japan Governor Masaaki Shirakawa planned to resign.
"At first, people thought that was intervention but it seems like the market was driven one-way by Shirakawa's rumour and so on. It was a bit like an accident," said Ayako Sera, market strategist at Sumitomo Trust Bank. "It's like everyone is afraid of ghosts in the market."
Japan spent an estimated 2 trillion yen ($23 billion) last Wednesday to combat a rise in the currency to a 15-year high against the dollar.
Prime Minister Naoto Kan, just re-elected as leader of the ruling party, faces a divided parliament so is keen to curb the strength in the yen, which has hurt Japan's stock market and sparked the ire of exporters.
But while Japan's unilateral action last week occurred throughout the global trading day and succeeded in driving the dollar up about 3 percent against the yen, Friday's dollar rise quickly faded and there was no sign of follow-through action.
Adding to the intervention doubts, authorities confirmed their yen selling on Sept. 15, but on Friday officials declined to comment.
DOUBTS
Many currency dealers doubt intervention would succeed in reversing the yen's rise, which they argue is driven more by dollar weakness.
The dollar has tumbled across the board on expectations the U.S. Federal Reserve will ease monetary policy by boosting its bond purchases to help revive the faltering recovery.
Japan's unilateratal intervention last week, the first in six years, prompted some grumbles among Group of Seven partners but most have stayed quiet on the issue.
Washington is focused on China, pressuring Beijing to let the yuan rise more quickly.
Indeed, Japanese Prime Minister Naoto Kan and U.S. President Barack Obama did not discuss currency intervention in a meeting in New York, Kyodo news reported, a sign to some that Washington was taking a hands off approach.
The dollar surge happened at midday Tokyo time.
The currency rose to as high as 85.40 yen from about 84.55 yen in a matter of minutes, and several traders said it looked like the Bank of Japan, which acts on behalf of the Ministry of Finance, had been selling yen.
Last Wednesday's intervention drove the dollar up to near 86 yen from a 15-year low of 82.87. But the yen has clawed back about half those losses.
Despite doubts about whether Tokyo intervened on Friday, analysts expect authorities to step into the market if the yen's rise against the dollar accelerates from current levels.
"They sent out a message that they are ready to intervene in the market again if the yen firms beyond what they believe is a proper level," Seiji Adachi, senior economist with Deutsche Securities in Tokyo, said of Japanese authorities.
"In terms of the economy, it is still going to be tough unless they bring the yen down to 90-100 against the dollar. But they probably can't do that. So they are going to just try to stop it going any higher."
NERVOUS TRADING
Showing the uncertainty over whether authorities had intervened, the dollar drifted back toward 84.70 yen as no government confirmation emerged.
After climbing into positive territory on the intervention speculation, Japan's Nikkei share average also drifted lower, closing down 1 percent on the day.
Both Finance Minister Yoshihiko Noda, who has said Tokyo must gain global understanding about its intervention, and the BOJ declined to comment.
Some traders watching the yen's every move speculated Tokyo was trying new tactics to scare dealers and get the biggest effect from their yen selling.
"Rather than saying clearly whether they did or not, they may be trying to make market players jittery," a trader for a Japanese brokerage house said.
So far Japan's yen selling has generated grumbling by some policymakers, but no widespread fallout -- in contrast to the international outcry over the yuan's exchange rate.
Obama urged Chinese Premier Wen Jiabao in New York on Thursday to take rapid steps to address a dispute over the value of China's currency and made clear the United States would protect its economic interests. So far G7 officials have not complained loudly about Japan trying to stem the yen's strength.
In some ways, Japan is fighting the Federal Reserve.
Japan's purchases of dollars come as investors price in the risk of the Fed printing more dollars to purchase bonds in a quantitative easing policy. Such expectations have driven short-term U.S. Treasury yields to record lows.
"The signals from the Fed are countering the bullets fired by the BOJ," Adrian Foster, head of financial markets research with Rabobank International in Hong Kong, said. ($1=85.15 Yen) (Additional reporting by Hideyuki Sano, Writing by Kevin Plumberg)