Concerns about the economy have caused Asian shares to fall following worse worse-than-expected weekly jobless numbers in the USA.
Tokyo’s Nikkei index was 2% down, the most effected, as rumours circulated an emergency meeting would be held by the Bank of Japan.
The yen has again moved near a 15-month high against the dollar and further measures to tackle its strength are being considered by policymakers.
Disappointing economic news on Thursday saw the yen at 85.265 to the dollar at the end of Asian trading, following downward pressure on the US currency.
Both the Hang Seng and the Shanghai composite were less than 1% down but the Nikkei closed 2%, or 183.3 points lower at 9179.38.
The Japanese currency’s strength is a huge concern as it puts a pressure on exporters, which are crucial to Japan’s economy.
Japan’s finance minister would not comment on whether it would have no choice but to intervene in the currency markets in an attempt to ease exchange rates.
But Yoshihiko Noda confirmed he was watching currency moves with “utmost interest”.
“I can’t comment on what is being discussed”, Mr Noda said, “but we are communicating with each other”.
The hardest-hit shares included Japan’s main exporters, reflecting the impact of the strong yen and growing concerns about the faltering recovery in the USA.
Toyota, which a third of its sales are dependent on American consumers, was down 1.8% and leading camera maker Canon was 2.2% lower.
A newspaper reported that Sharp would cut its output of LCD panels that it sells to other companies and then went down 2.7% shortly after.
