By Kaori Kaneko and Sumio Ito
TOKYO (Reuters) - The Bank of Japan could consider buying foreign bonds as an option to weaken the yen, if government intervention in the currency market is deemed by the United States to be exchange rate manipulation, an adviser to Prime Minister Shinzo Abe said on Tuesday.
"Japan's monetary authorities should intervene in the currency market not to change the yen's general course but to discourage speculators - who bet too much on the rise of the yen - whenever it rises excessively," Koichi Hamada, an emeritus professor of economics at Yale University, told Reuters in an interview.
"If Japan's currency intervention is considered manipulation of exchange rates, BOJ buying of foreign bonds is an option for the same objective in a moderate form," he said.
As exchange rate policy is the government's preserve rather than the central bank's, the Bank of Japan has avoided buying foreign bonds in the past.