The Japanese currency, the yen, falls 0.4 per cent to 160.39 yen per dollar. This is the lowest level against the dollar since 1986.
The market has started speculating about whether Japanese authorities will intervene in the currency market.
One factor pushing the yen exchange rate down is that interest rates are significantly lower in Japan than in the US.
Since the turn of the year, the yen has lost more than 12 per cent of its value against the dollar, which affects Japanese households' and companies' purchasing power.
Japan spent the equivalent of 62.2 billion dollars (approximately 660 billion kronor) on currency interventions between 26 April and 29 May this year to strengthen the pressured currency. At that time, the yen exchange rate was not as low as it is now.
Many analysts believe that the Japanese government will wait for the reaction to the fresh inflation figure for May from the US on Friday before intervening again.
Other analysts believe that the pain threshold has been lowered to an exchange rate of 165 yen per dollar before it is time to intervene with support purchases.
