Japanese exporters say the appreciation of the currency threatens to kill off the signs of economic recovery that have begun to show.
On Tuesday, before the yen's surge against the US dollar, the Economic Planning Agency had pleased economists with upbeat economic growth figures for the first quarter of this year, which showed a higher-than-expected annualised expansion of 3.9 per cent compared with no growth for last year.
But the turmoil on the currency markets quickly changed sentiment in Tokyo.
Takeshi Nagano, head of Nikkeiren, the Japan federation of employers' associations, said: 'The abnormally strong yen will not only damage the Japanese economy, which has been gradually recovering, but will bring about the collapse of manufacturers in the country.'
Commenting on the yen's refusal to move in value much below Y101 to the dollar, the chief cabinet secretary, Hiroshi Kumagai, said after yesterday's emergency meeting: 'This deviates from fundamentals. I hope it will not become too speculative.'
Mr Hata's ministers agreed at yesterday's meeting that Japan should continue its push towards domestic reform and deregulation.
In theory an increase in domestic demand should help the country's huge trade surplus to fall, assisting the dollar to stop its decline against the yen.
Economists say that because of ongoing restructuring and cost-cutting by Japan's big corporations, an exchange rate of between Y100 and Y105 to the dollar would not have overly-negative effects on the country's economic recovery.
But if the dollar falls to the Y95 level, many economists fear the recovery could be stopped in its tracks.
With corporate spending in the doldrums and banks still struggling to lay off huge unperforming loans, much now depends on the Japanese consumer.
In statistics just released for the first quarter of this year consumer spending rose 5.8 per cent, encouraged by widespread discount retailing and the lower price tags on imported goods that benefit from a stronger yen.
This month a long-promised income tax cut is due to take effect, and continuing growth will depend largely on whether consumers decide to spend their tax windfall or put it into savings accounts.