Japanese yen touches 3 decades low against dollar

The Japanese yen touched a 32-year low against the US dollar after official figures showed that prices had risen faster than expected in the United States.

The yen fell to 147.66 against the greenback before regaining some ground.

Japanese Finance Minister Shunichi Suzuki said_ his government will take "appropriate action" against the currency's volatility.

In a rare move in September_ Japan spent almost $20bn (£17.6bn) to prop up the country's struggling currency.

"We cannot tolerate excessive volatility in the currency market driven by speculative moves. We're watching currency moves with a strong sense of urgency_" Mr Suzuki told reporters after attending a G7 finance meeting in Washington_ DC.

Last month_ Japan intervened in the global currency market to help support the weakening yen. That move came after the yen hit a fresh 24-year low against the dollar_ marking the first time that Japanese authorities had intervened in the currency market since 1998.

However_ analysts have warned that interventions like this would have little effect as long as Japan's interest rates remain far lower than those in the US.

The Japanese currency has come under increasing pressure in recent months_ mainly due to the very different approach taken by the Bank of Japan (BOJ) in comparison with the US Federal Reserve.

On Thursday_ official figures showed that consumer prices in the US rose more than expected last month in a sign that the inflation fight in the world's largest economy is far from over.

Inflation_ the rate at which prices rise_ was 8.2% in the 12 months to September_ down from 8.3% in August.

Rising consumer prices in the US are being closely watched as the Federal Reserve's efforts to cool inflation push up the value of the dollar as well as global borrowing costs.

America's central bank has been aggressively raising its interest rates to combat soaring prices_ which has made the dollar more attractive to investors. In contrast_ the BOJ kept rates very low.

The dollar's strength on the global financial markets is also having an impact on other major currencies around the world_ including the pound and the euro.