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By MarketWatch

HONG KONG (MarketWatch) — Japanese officials sounded growing alarm about the state of the economy and the negative impact from the yen’s rise on Wednesday.

However, talk of intervention in the foreign exchange markets failed to curb gains in the Japanese currency, which rose to a fresh 15-year high against the dollar in Asian trading.

Bank of Japan Gov. Masaaki Shirakawa and finance minister Yoshihiko Noda each hinted at new fiscal measures, or even potential forex intervention, but stopped short of saying such policies were imminent.

The U.S. dollar
/quotes/comstock/21o!x:susdjpy
(USDYEN
83.5500,
-0.2500,
-0.2983%)
fell to ¥83.32 in afternoon trading hours in Tokyo, piercing its low of ¥83.49 in North American trading overnight, before recovering to the mid-83-yen level. The euro
/quotes/comstock/21o!x:seurjpy
(EURYEN
106.2900,
+0.0100,
+0.0094%)
, meanwhile, dropped to 106.06 yen from 106.29 yen.

Japanese stocks fell sharply as the yen rallied, with the Nikkei stock average briefly dipping below the 9,000-point level before recovering to end the session 2.3% lower at 9,010.5.

Shirakawa told a parliamentary session of concern about the outlook for the economy. The remarks were at odds with the Bank of Japan’s forecast for moderate growth as part of its economic outlook released during its monthly policy statement on Tuesday.

“We are now concerned about downside risks. If the downside risks materialize and the economy worsens at a faster pace than we expect, we are ready to take additional measures,” Shirakawa was cited as saying in reports during a parliamentary session.

Noda told a parliamentary committee the government stands ready to take steps to curb further gains in the yen, if necessary, and that the steps could include foreign exchange market intervention.

Talk of the possible forex intervention marked the first time Noda has mentioned it as a policy option, according to reports.

“We will take decisive steps–which of course include intervention–when it becomes necessary,” Noda said.

Japan officials voice concern over economy

By Howard Gold

NEW YORK (MarketWatch) — Mention Old Europe and you’ll probably think of small, cobblestone streets, old buildings, wonderful museums — and stagnant economies.

In fact, “becoming like Europe” is for many Americans the worst possible thing that could happen to our country.

But at least one European nation has been posting astonishing growth numbers, easily outdistancing our own. Its top-notch exports have been booming, especially in China, the world’s dynamo, where its brands are highly desired.

And its unemployment rate, at 7.3% in June, is more than two full percentage points below ours and about in line with that of Canada, our prosperous neighbor to the north.

That country, of course, is Germany, which has bounced back strongly from the global recession and financial market meltdown.

Although problems with its banking system linger — as does the threat of another round of the euro zone’s crisis — Germany’s prowess as an export-oriented manufacturer will leave it in a strong competitive position for years, even as its economic performance becomes more “normal.”

Carsten Brzeski, an economist with ING in Brussels, told the U.K.’s Daily Mail that Germany’s economy was in a “league of its own.”

German GDP grew at 2.2% in the second quarter. In the U.S., that figure was recently revised downward to 1.6%, about halfway between that of Germany and the U.K.’s 1.1%.

So, why is Germany doing so well? A focus on its competitive strengths, a government stimulus program that worked, and the world economy’s big bounce back from the abyss.

Because as good as the second quarter of 2010 was, that was how bad its first quarter of 2009 was. Germany’s GDP plunged 3.5% then, as the world seemed on the verge of another Great Depression.

But the German government swung into action. Germany’s bold plan included a 480 billion euro bailout of German banks, 115 billion euros for troubled companies, and 80 billion euros worth of domestic stimulus.

There were plenty of “bridges to nowhere” in it — millions of euros going to crazy projects like stud farms and a museum of hunting weapons. But two things worked well: Germany’s own “cash for clunkers” plan, which boosted auto sales and helped domestic parts suppliers; and a particularly effective program that encouraged companies to reduce workers’ hours, but not lay them off.

The basis for the “short-time” working system, “has existed in German social legislation for decades,” wrote Der Spiegel.

“When companies experience sharp declines in sales, they are permitted to reduce their employees’ working hours, and the government offsets a portion of the costs. The goal is to avoid layoffs and retain employees until the recession is over.”

The program was wildly successful: It allowed 1.5 million workers to keep their jobs at reduced hours — and continue to spend money — while keeping in place the workforce that would allow companies to gear up quickly once the economy bounced back.

Outside the Box: Germany: Europe’s new superstar