After official figures showed that prices had risen faster than expected in the US, the Japanese yen touched a 32-year low against the dollar; it dropped to 147.66 against the US dollar, before regaining some ground.
Japanese Finance Minister Shunichi Suzuki said the government will take "appropriate action" against the currency's volatility. Last month, Japan spent almost $20bn to prop up the nation's struggling currency. That move came after the yen hit a 24-year low against the dollar. It marked the first time that Japanese authorities had intervened in the currency market since 1998.
However, analysts have warned that interventions like this would have little effect as long as Japan's interest rates remain far lower than those in the US. The Japanese currency has come under increasing pressure in recent months, mainly due to the very different approach taken by the Bank of Japan (BOJ) in comparison with the US Federal Reserve.
The dollar's strength on the global financial markets is also having an impact on other major currencies around the world, including the pound and the euro.
Source: bbc.com