TOKYO (AFX-ASIA) - The yen eased in midmorning Tokyo on verbal intervention by officials, threatening action by the Bank of Japan to weaken the currency, though the dollar remains heavy on position adjustments, dealers said. The market ignored this morning's revision of Japan's full year GDP forecast, which had been earlier leaked to domestic newspapers, they said, adding that euro-long and yen-short positions remain to be liquidated. Finance Ministry senior deputy director-general Zenbei Mizoguchi told AFX-Asia this morning that a stronger yen against the dollar is undesirable and the ministry will take appropriate action if needed. "I believe the current economic fundamentals do not justify a stronger yen against both the euro and the dollar," Mizoguchi said at the ministry. "There is currently speculative action centring on the euro so this move will be corrected at some point," he added. "The yen's rise is not desirable and we are ready to take proper action, watching closely market moves." The Cabinet Office revised its year to March real GDP forecast to a contraction of 0.9 pct, reversing a previous estimate of a rise of 1.7 pct. The revised outlook assumes that the dollar will average 121.8 yen, compared with the previous estimate of 109 yen. Sanwa Bank foreign exchange vice president Mitsuru Sahara said the market ignored this morning's revised growth figures, though the possibility of actual intervention following the verbal warnings is keeping the yen capped. "The dollar/yen is heavy at around the 120.00 level off a low of 120.01," he said. "Many in the market are scared of intervention by the Bank of Japan so no one dares to sell below 120." Sahara said the revised full year growth figure, which had been well flagged in the press, had little impact on the market. "This movement is not based on economic fundamentals just on technical positioning, the GDP figures are not affecting the dollar/yen market. Everyone is long on the euro and short on the yen," he added. The liquidation of these positions is putting upward pressure on the yen and downward pressure on the euro, with last night's surprise 50 point cut by the European Central Bank failing to provide a boost for the currency. "The rate cut is a bit surprising because most traders had expected just a 25 basis point cut and not 50 points but the euro still seems very heavy against the dollar and the yen because the market is already euro-long," Sahara said. "They need to close their euro positions and so they need to sell euro." Economic sentiment on Europe remains negative. "Even though they cut 50 basis points..., economic fundamentals from Europe are basically very bad, the same as the US, that is why the yen is relatively strong (as Japan's economy) is already factored in."