U.S. Treasury Secretary Timothy Geithner said on Wednesday he believes strongly in the need to maintain a strong dollar and said the United States was determined to get its budget deficit down.

The dollar's decline has been a source of concern in the export-heavy region, especially since top exporter China keeps its currency's value closely managed against the U.S. dollar and so felt less impact on prices for its exports than other Asian nations that let their currencies float freely.

I believe deeply that it's very important to the United States, to the economic health of the United States, that we maintain a strong dollar, Geithner said in a meeting with Japanese reporters at the U.S. embassy.

The U.S. Treasury chief was visiting Japan before heading on Wednesday night to Singapore to join a meeting of finance ministers from the 21-nation Asia-Pacific Economic Cooperation forum (APEC) on Thursday. It was his first trip to Japan since assuming the post in January.

The dollar index, which measures the dollar's value against a basket of six major currencies, has fallen 7.6 percent this year and hit a 15-month low of 74.889 .DXY on Wednesday.

Geithner said the United States was well aware it must work to keep investors' confidence in U.S. economic policymaking.

We bear a special responsibility for trying to make sure that we are implementing policies in the United States that will sustain confidence ... in investors around the world that as growth recovers and growth strengthens that we're going to bring our fiscal position back to a sustainable balance, he said.

The U.S. budget deficit soared to a record $1.4 trillion in the fiscal year that ended on Sept. 30 and is expected to be about the same this fiscal year.

Geithner talked with reporters after meeting Prime Minister Yukio Hatoyama and before a lunch meeting with Bank of Japan Governor Masaaki Shirakawa. He met Finance Minister Hirohisa Fujii on Tuesday night.

In a separate interview with public broadcaster NHK on Wednesday, Geithner said that while the U.S. economy was growing again, the recovery was still in the very early stages.

It's a very early stage of recovery, again this is a very tough economy, Geithner said.

Unemployment is really very, very high, exceptionally higher in the United States. It's still rising. It's probably going to rise for a bit longer, until you see a longer period of growth take hold.

The U.S. jobless rate jumped to a 26-½ year high of 10.2 percent in October and economists polled by Reuters expect it to hit 10.5 percent by the middle of next year.

LESS DRIVEN BY U.S. CONSUMER

Geithner said he was encouraged by Tokyo's commitment to shift its policy towards growth that comes from more spending at home rather than from selling abroad -- a policy that the Obama administration is encouraging throughout Asia.

Both the (finance) minister and the prime minister made it clear at the very beginning of our conversations that the basic objective of economic policy here is to make sure that future growth comes more from domestic demand, he said.

Geithner said the reality was that if a still-struggling recovery was to be turned into sustainable future growth it will have to be less driven by the U.S. consumer because heavy levels of debt were forcing American consumers to save more.

Geithner cited signs of stabilisation in the global economy but said it still needed the stimulus that governments around the world have poured in to foster stronger growth.

We're at a point now where I think we all recognise that although the world economy is now growing again, you don't yet have all the conditions for a self-sustaining recovery led by the private sector, he said.

It's going to take continued, carefully designed support from government policy as a bridge to that recovery, Geithner added. It's too early on a global basis to see people shift to restraint.

In response to repeated questions about China's policy of closely managing the exchange rate for its yuan currency, Geithner credited China with helping get the global economy out of crisis and welcomed Beijing's commitment to adopt a more flexible currency over time.

China has an excellent record of delivering on broad policy objectives, Geithner said. But he said a more flexible currency was only part of a very complicated mix of policy changes Beijing was attempting, which he said show encouraging signs of boosting domestic demand-led growth in the world's No.3 economy.

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