The dollar fell to a 15-year low against the yen on Tuesday, to 84.60. The euro briefly hit 107.21 before recovering to 107.29 in the early afternoon.
The strength of the Japanese currency hit domestic shares, with the Nikkei index dropping below the 9,000 points for the first time since May 2009, before recovering.
Markets leaned towards the safe-haven yen as there are growing concerns about a slowdown of the US economy and weak European growth.
Japanese finance minister Yoshihiko Noda is expected to speak at a press conference later Tuesday.
On Monday, Prime Minister Naoto Kan spoke with Bank of Japan governor Masaaki Shirakawa to discuss the economic impact of the strong yen, which affects Japanese exports.
They did not announce any proposals, indicating that Japan will not take any immediate action on easing the strength of the currency.