However, even as the world's leading economies were giving Japan the green light to intervene, central banks in Europe and the US were preparing for further interest rate cuts which would not ordinarily help their currencies against the yen.

Jean-Claude Trichet, the president of the European Central Bank, signalled that the ECB would cut interest rates again at its policy meeting next week. Meanwhile the market expects the Federal Reserve will cut rates by half a point tomorrow to 1 per cent.

The rise in the yen – which hit Y93.78 against the dollar and reached a six year high of Y116.21 to the euro – came as investors continued to pull money out of emerging markets and high yielding advanced economies such as Australia, in a reversal of the once-popular “Yen carry trade”, playing havoc with equity markets on both ends of the trade.