The surprise announcement by Japan's top currency diplomat, Masato Kanda, sparked panic in the markets during the European session, prompting a sharp jump in the yen and the US dollar.
Kanda announced on Thursday evening that the Japanese government had intervened in the foreign exchange market by buying the yen against the US dollar to stem the currency's sharp fall.
This is the first time the Japanese government and the Bank of Japan (BOJ) have taken such a step since June 1998.
As a result, the yen posted a remarkable surge that helped it bounce back from a 24-year low against the US dollar as soon as the report came out.
This can be seen in the price movement of the US dollar currency pair against the yen plunging around 500 pips from the 24-year high.
In the meantime, the US dollar's retreat from its 20-year high has given most major currencies a chance to recover slightly from the fall following the Federal Reserve's (Fed) policy decision.
The pound gained slightly but was still trading around 37-year lows as investors focused entirely on the upcoming Bank of England (BOE) meeting.
