TOKYO, Aug 5 (Reuters) - Japanese Finance Minister

Shunichi Suzuki said on Monday authorities were watching

exchange-rate moves closely, speaking after the Nikkei stock

average plummeted in its biggest rout since 1987.

He said it was desirable for foreign exchange rates to move

in a stable manner and reflect economic fundamentals.

Speaking to reporters, he declined to comment on whether

current yen levels were deemed excessive.

"It's hard to say what is behind the decline in stocks,"

Suzuki told reporters, adding that the government was

cooperating with the Bank of Japan (BOJ) and closely monitoring

markets with a sense of urgency.

Japan's Nikkei stock average plunged 13% to hit

seven-month lows on Monday and the safe-haven yen surged as

fears of a U.S. recession sent investors fleeing from risk.