Japan's government has intervened in the currency markets for the first time in more than six years after the yen soared to a 15-year high against the dollar.

Tokyo is believed to have sold between 300 billion and 500 billion yen ($3.6 billion to $5 billion) to weaken its currency which is knocking its exporters hard and delaying their recovery from the global slowdown.

The dollar had hit Y82.87 after Prime Minister Naoto Kan saw off a leadership challenge from rival Ichiro Ozawa. The market had been speculating that he would be less likely to take measures to weaken the yen.

Ulrich Leuchtmann, analyst at Commerzbank, says: 'Contrary to his contender Ichiro Ozawa, he [Kan] had so far been considered to be hesitant on the matter of interventions. This could have caused a self-amplifying downward momentum in USD/JPY which would have been more difficult to control, whereas it is being stopped in its tracks now.'

Finance minister Yoshihiko Noda said the yen's rapid appreciation was harming the stability of the country's struggling economy and finances.

The yen has strengthened significantly against other world currencies following the 2008 financial crisis. It has piled on 58 per cent against the euro since July 2008 and 10 per cent against the dollar since the start of May amid fears that the US economic recovery is slowing and the Federal Reserve may need more quantitative easing.

Toyota has estimated that every one-yen climb against the dollar hits its earnings to the tune of 30 billion yen.

'We cannot tolerate it,' Noda told a news conference. 'We will closely monitor currency developments, and take firm action including intervention. Our country's economy is still in a very severe situation with continued deflation.'

The move sent the yen down by around 2 per cent against major currencies.

Simon Denham, chief executive at Capital Spreads, says: 'It has been quite some time since a major Central Bank has taken on the market, but with the new PM in Japan looking for some breathing space on the currency front to enact his fiscal squeeze the events of last night are perhaps understandable.'

Leuchtmann at Commerzbank said the element of surprise was necessary to the success of the measure.

'If the exchange rate effects are to be maximised for the amount of intervention volume employed, interventions have to come as a surprise,' he says.

He adds that although the Ministry of Finance and the Bank of Japan has not officially drawn a line in the sand around the 83.00 mark in USD/JPY below which the exchange rate will not be allowed to drop, this was implicit in the timing of the move.

Analysts believe that unlike China, Japan will face little political resistance for the US for its intervention in the currency markets as few will be able to claim the yen is currently undervalued like the renminbi. However, China itself could be a different story with some Japanese officials claiming China's purchase of government bonds could be one of the drivers behind the yen's rise. Beijing is keeping its own currency under tight control to protect its own exporters.

This is not the first time the government has jumped into the currency markets. In 2004, Japan sold around 35 trillion yen to help in its fight against deflation as well as slowing the appreciation of its currency.

However, Alistair Cotton of Currencies Direct warns: 'Unilateral intervention in the FX markets does not have a successful record over the long-term in curbing market forces, so this story will run for a while as we see retests of the 82 level and the possibility of the kitchen sink strategy by the Japanese.'