By 0800 GMT it had pushed through the 140 yen barrier and was trading at 140.66 to the dollar.

The yen has been hit by the continued weakness of the Japanese economy, which has kept interest rates low, and worries about the debts of Japanese banks.

In contrast, the US economy is booming, adding 300,000 jobs a month according to last week's figures.

Japan's finance minister Hikaru Matsunaga warend again about the dollar's excessive strength and threatened "decisive measures" to protect the yen.

Concerted Action Needed

Japan's Finance Ministry has had a lot to apologize for this year

But dealers said that the Bank of Japan had already spent $20bn in April to support the yen, which fell in the last two months from 129 to the dollar in the past two months.

They said that only action by the G7, the group of leading industrial natiions, acting in concert, could halt the yen's decline.

"The market remains unconvinced that concerted action will be taken," commented a senior trader in London.

Deputy finance ministers of the G7 gather in Paris on Tuesday for a meeting which will also be considering the crisis in Russia.

Vice finance Minister Koji Tanami said that the G7 "have agreed to co-operate in response to excessive yen depreciation," and said that the weak yen is a concern for Europe and the US as well. He said that the yen's problems could hit other Asian currencies.

But Tony Norfield, head of research at ABN AMBRO bank in London, was skeptical of US support. "As long as domestic demand is strong in the US they can live with a strong dollar," he commented.

Mr Yen to Go?

Markets were also affected by reports that the key Japanese official in charge of international finance may be moved.

Eisuke Sakakibara, may be shifted later this month.

He gained the reputation of 'Mr. Yen' for his outspoken comments which helped lower the yen from its rate of 80 to the dollar.

He has been criticised in the past for accepting excessive hospitaliity from financial institutions.