Japanese yen 'hits post-war high against US dollar'
Yen hits record-high against US dollar as Nikkei falls
(about 1 hour later)
Despite the ongoing crisis in Japan the yen briefly passed its previous US dollar high of April 1995, Kyodo news agency reports.
The Japanese yen rose against the US dollar hitting the highest level since the end of the Second World War.
The dollar hit 77.60 yen, beating the record of 79.75, before rallying.
The yen climbed as high as 76.25 against the US dollar. However, it weakened in later trading and is currently close to 79.42.
It is thought the surge is being driven by speculation Japanese insurers will have to repatriate yen in order to pay reconstruction costs.
Japanese shares slid as investors worried about the impact of a stronger yen on profits at the country's biggest exporters.
This would mean swapping other currencies for yen, potentially pushing its value even higher.
The Nikkei 225 index shed 3.7% to 8,764.98 points in early trading.
Traders will be watching whether the Japanese central bank will intervene in the currency market to stem the yen's gains.
Earlier on Wednesday the Bank of Japan pumped an extra 3.5 trillion yen ($43bn; £27bn) into the financial markets.
Stronger currency
The central bank also announced a cash input of 23tn yen ($284bn) on Monday and Tuesday.
The Bank of Japan has been using these cash injections to shore up consumer confidence and maintain liquidity.
"Apart from intervention, there isn't much to stop this slide and the dollar doesn't look like it's coming back soon," said Brian Dolan, chief strategist at Forex.com in New Jersey.
A stronger currency makes Japanese exports less competitive and could hurt the economy.
