Australian and New Zealand dollars dipped today after the Japanese government announced that its economy had shrunk.
The Australian dollar fell to a four-month low against the yen, while the New Zealand dollar slumped to its weakest standing in just under two years.
A contraction of 0.6 per cent in the Japanese economy in the second quarter led investors to sell high-yielding foreign currencies amid fears of recession.
Masashi Kurabe, head of currency sales and trading at Bank of Tokyo-Misubishi UFJ, told Bloomberg: "The yen is being bought against higher-yielding currencies by Japanese investors.
"They are worried over slowing economies and interest-rate reductions in Australia and New Zealand."
Dollars of New Zealand and Australia were in the top three worst performers against 16 of the most-active currencies against the yen in Asian trading following the Japanese government’s announcement.
The currency exchange rate is now one Australian dollar to 95.2 Japanese yen and one New Zealand dollar to 76.2 Japanese yen.