Surge in yen

The yen came close to a 3.5-year high against the US dollar, as the failure of new policy initiatives to curb the currency's resurgent strength sparked new optimism among investors over the economic recovery in Japan.

Against the dollar, the yen surged to 103.54 yen, just half a yen below its earlier high, but shares in the Nikkei-225 index slumped 2.73 per cent as some investors showed concern that the yen's strength could hamper the Japanese economy.