Japan on Monday intervened in currency markets for the first time since August to weaken the yen, after the unit\'s latest post-war dollar high underlined its threat to the nation\'s export-led economy.

Japan on Monday intervened in currency markets for the first time since August to weaken the yen, after the unit\'s latest post-war dollar high underlined its threat to the nation\'s export-led economy.

Tokyo has faced domestic pressure to act on the yen due to worries over its impact on the nation\'s economic recovery.

But the move may raise questions from Japan\'s global trade partners ahead of this week\'s G20 meeting in France, with pressure on China to take a more hands-off approach to the yuan.

Finance Minister Jun Azumi told reporters that Japan\'s action was unilateral and did not comment on the size of the intervention.

The dollar surged by around 5 percent to as high as 79.53 after hitting a fresh post-war low of 75.32 yen in earlier trade Monday. The move also saw the euro rise sharply to 111.57 yen from 107.06 yen.

"Although I had repeatedly said we will take decisive measures against speculative moves in markets, those moves unfortunately continued so I ordered intervention," Azumi told reporters at a news conference.

"It was solo intervention this time," Azumi added.

Initial gains were quickly weighed by profit taking and as Japanese exporters looked to repatriate overseas earnings at the newly improved rates ahead of monthly book closing, said dealers.

Japan\'s Nikkei index rose by more than 0.50 percent in the wake of the move before ending the day in negative territory, as the yen strengthened back to around 78.13 to the dollar in afternoon trade.

"It is unlikely to be enough to turn the tide," noted Julian Jessop of research firm Capital Economics, adding that Japan\'s other recent forays into currency markets have had a limited long-lasting impact on rates.

"Above all, the underlying fundamentals driving the yen higher remain in place, notably demand for a safe haven from the financial crisis in Europe," he said.

The yen has renewed its post-war highs against the dollar and surged versus the euro as investors seek refuge from volatile markets stirred by eurozone debt fears and concerns for the global economy.

Japanese officials have in recent weeks stepped up intervention rhetoric in an attempt to verbally weaken the unit, but it continued to strengthen regardless.

Officials had hoped last week\'s European agreement on measures to shore up the eurozone and help resolve the bloc\'s debt crisis would boost confidence and have an easing effect on fund flows into the Japanese unit.

The currency issue is expected to emerge at this week\'s meeting of leaders of the Group of 20 industrialised and emerging economies in Cannes, France.

Amid pressure on China from the US and other countries to allow greater flexibility in the value of the yuan, analysts say that such efforts could become complicated if Japan is seen to be softening its own currency.

But concerns are growing in Japan that the strong yen, which erodes the repatriated profits of exporters and makes their goods less competitive, could undermine a fragile recovery from the March 11 earthquake and tsunami.

Japan\'s manufacturers have staged a rebound since the disasters that left around 20,000 dead or missing and shattered crucial supply chains, heavily disrupting Japanese industry.

But fears have mounted that such efforts are being compromised by the strength of the Japanese currency, with every one yen rise wiping tens of billions of yen from the annual operating profit of giants such as Toyota.

With more companies considering shifting jobs and production overseas in an effort to make their goods more competitive, officials have warned of a "hollowing out" of Japanese industry.

The Bank of Japan on Thursday announced further easing measures to help safeguard the economic recovery from the impact of a record-high yen and the fallout from the eurozone crisis.

Monday\'s intervention is Japan\'s first since the government spent 4.5 trillion yen ($59 billion at current rates) in August to stem the rise of the currency. It is the fourth intervention since September 2010.

"It would not be a surprise if the amount of funds used for this intervention surpass previous moves," said Teppei Ino, analyst at the Bank of Tokyo-Mitsubishi UFJ.