Japan’s top currency diplomat, Masato Kanda, said authorities were “gravely concerned and on high alert” about the yen’s rapid decline.
Japan’s low-interest-rate regime relative to the United States continues to weigh on the yen.
The latest slide follows the Bank of Japan’s (BOJ) decision this month to hold off on reducing bond-buying stimulus until its July meeting.
The dollar hit its strongest level against the yen since December 1986 and was last up 0.6% at 160.66.
The market appears to be driving itself forward with respect to BOJ policy, said Eugene Epstein, head of North American structures at MoneyCorp in New Jersey.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.31% to 106.00, the euro fell 0.25% to $1.0686.
On Wall Street, the S&P 500 was last little changed while the Nasdaq was slightly higher, although shares of artificial intelligence chip leader Nvidia were down 1.6%.
The selloff in the previous session wiped $430 billion off Nvidia’s market value.
Among the gainers, shares of Amazon Inc rose more than 3%, bringing the company’s market value above $2 trillion, becoming the fifth US corporation to cross that level.
The Dow Jones Industrial Average was up 43.48 points, or 0.11%, at 39,156.03, the S&P 500 was up 0.30 points, or 0.01%, at 5,469.71 and the Nasdaq Composite was up 48.90%, or 0.01%, at 5,469.71.
MSCI’s gauge of stocks across the globe fell 0.89 points, or 0.11%, to 802.88.
European shares slipped over the weekend as investors focused on, among other things, French elections. The STOXX 600 index fell 0.56%.
In the United States, President Joe Biden and former President Donald Trump head into the first of two debates on Thursday before their rematch this November.
Investors are also looking for signs on the US inflation picture and that the Federal Reserve may start cutting interest rates.
Fed officials have urged patience on interest rate cuts. Fed Governor Michelle Bowman this week reiterated her view that keeping policy rates steady “for a while” may be enough to bring inflation under control.
Investors awaited Friday’s release of the US personal consumption expenditures (PCE) price index, the Fed’s favorite measure of inflation, with economists polled by Reuters expecting annual growth to ease to 2.6% in May.
US Treasury yields have risen amid rising inflation in other countries.
On Wednesday, Australia’s consumer inflation hit a six-month high in May.
The yield on benchmark US 10-year notes rose 6.6 basis points to 4.304%, from 4.238% late on Tuesday.
US crude rose 0.49% to $81.23 a barrel and Brent rose 0.65% to $85.56 a barrel.
Spot gold fell 0.78% to $2,300.96 an ounce.
(Additional reporting by Gertrude Chavez-Dreyfus in New York; and Samuel Indyk and Ankur Banerjee; Editing by Mr. Navaratnam, Himani Sarkar, Alex Richardson, Gareth Jones and Alexander Smith)
(You can now subscribe to our ETMarkets WhatsApp channel)