At the worst possible moment for Japan's economy, the yen has surged to all-time highs against the US dollar and other currencies, making life for its hard-pressed exporters, already battling with disruptions to supply chains and power, even more difficult.
Finance ministers of the G7 group of leading economies discussed last night how they might ease the situation, with market expectations mounting that there may be a campaign of direct intervention by the world's major central banks to drive the yen lower in these extreme conditions.
The French Finance Minister Christine Lagarde, who organised the discussions, said the aim was to "see how we can take part in their debt issues and how we can react on a financial level".
The yen rocketed to 76.25 against the dollar during trading yesterday, in effect its highest-ever level, and hovered around those peaks for much of the session. The immediate cause is "repatriation" – some of the vast funds held by Japanese households and businesses abroad in dollar, euro, sterling and other currencies now being sold and converted to yen to pay for reconstruction and repair work at home.
Traders also said that speculation in advance of such moves had also driven the Japanese currency higher. An unwinding down of the yen "carry trade", where Japanese currency is borrowed at ultra-low interest rates and invested in higher-yielding Australian and New Zealand dollar funds has also contributed.
The unhelpful trends in currency markets have developed despite strenuous efforts by the Bank of Japan to flood the system with yen, through successive bouts of quantitative easing, which usually has, as a side effect, a profundly depressing effect on the value of a currency.
The Bank of Japan yesterday morning offered emergency funds for a fourth consecutive day, offering ¥5 trillion (£39bn) to the banks, and a further ¥1trn in the afternoon. On Monday the bank pumped ¥7trn into the system. Taking all operations into account, the bank of Japan has offered a total of ¥55.6trn in short-term funds in the past three days, helping to allay fears of a "credit crunch" and financial crisis to add to the natural and nuclear disasters that have overwhelmed her.
Glenn Uniacke, a senior dealer at Moneycorp, said: "Everyone, from the man on the street through insurance firms to the central bank, has foreign-currency investments. Now, with homes and towns and power stations to rebuild and massive insurance claims to settle, they need their money back."
"So holdings denominated in dollars and pounds and euros and rand are being repatriated. That means buying yen. And nobody is selling, so the price goes up. The last thing Japan wants or needs right now is a strong yen but, for the moment, it looks as though it will have to live with one."
After a shaky start, equity markets in London, Europe and New York followed the lead from Tokyo's stock marret bounceback.