As the Japanese currency took advantage of its status as a refuge currency amid global economic uncertainty, the dollar fell to a 15-year low against the yenon Sept. 7. It plunged to 83.52 at point during the day.
The steady rise in the value of the yen in recent weeks has unnerved Japanese authorities who see the trend as a threat to Japanese exports and ultimately to the country's recovery.
The gain in the yen was also supported by the absence of new measures from the Bank of Japan, whose policymakers convened on Sept. 7, to stem the upward momentum.
The bank kept its key interest rate unchanged at 0.% to continue nurturing a moderate recovery and signaled stronger concern about the impact of a surging yen.
"We are aware that Japanese exporters have been significantly affected by the yen's strength," said Bank of Japan governor Masaaki Shirakawa. "We are very carefully watching the impact of the stronger yen on the Japanese economy," he added.
The central bank last week extended a multi-billion-dollar loan program to counter the effects of a strong yen on the Japanese economy.
In its second loan expansion since March, the bank said it would offer 10 trillion yen (US$118 billion) in six-month low-interest loans in addition to 20 trillion yen from December's three-month loan scheme.
But markets were left unimpressed by the move, as stocks slumped and the yen rose further following its announcement.
Copyright Agence France-Presse, 2010