The dollar sank as low as 86.51 yen in Tokyo trading Thursday, the lowest since July 1995.
Finance Minister Hirohisa Fujii said Japan will take appropriate steps if exchange rates move abnormally, according to Kyodo News agency.
A strong yen is generally seen as bad for Japan's economy because it erodes overseas income for the country's big auto and electronics exporters.
The euro rose to a 15-month high against the dollar Wednesday. In trading Thursday, it eased to $1.5114 from $1.5132 late Wednesday.