(Bloomberg News) The yen strengthened against the dollar, surging to a post-World War II high, on speculation Japan will delay intervention to limit the currency's advance as the nation struggles to avert disaster at a nuclear-power plant.

The yen soared 4.5% in 26 minutes as markets closed in New York yesterday and re-opened in Asia amid speculation automated trades to limit losses were taking place. Finance Minister Yoshihiko Noda said Group of Seven officials will meet tomorrow to discuss the aftermath of last week's earthquake in Japan. The Swiss franc strengthened on demand for a haven and higher-yielding currencies, such as the New Zealand dollar, fell.

"Intervention, that continues to be the question on everyone's mind, and what will come out of the G-7 finance ministers' conference," said Mary Nicola, a currency strategist at BNP Paribas SA in New York. "A high yen undermines local investors' appetite, leading to a further decline in Japan's stock market. Japan needs a weaker yen, mainly for exports, especially as domestic demand is held back given the impact of the earthquake."

The yen gained 1.1% to 78.72 per dollar at 9:45 a.m. in New York, after touching 76.36. Japan's currency advanced to 110.21 per euro from 110.62, after climbing to 106.61, the strongest since Sept. 13. The euro appreciated 0.7% to $1.3999, after rising to $1.4053, the highest since Nov. 8.

G-7 Call

The G-7 discussions will begin at 7 a.m. Tokyo time and encompass currencies, Noda told reporters in the capital today. Japan will brief officials on the damage to the economy, he said. Noda declined to comment on any possible intervention.

Japanese Economic and Fiscal Policy Minister Kaoru Yosano urged calm trading of the yen and said he hopes officials from the G-7 nations will express unity during talks tomorrow. Yosano was speaking at a press briefing in Tokyo today.

New Zealand's dollar dropped the most among the major currencies, and Australia's currency slumped, as the Nikkei 225 Stock Average fell as much as 5%, damping demand for higher-yielding assets.

Switzerland's franc advanced to 89.11 centimes per dollar, a record high, before trading 0.8% stronger at 90.09. The Swiss central bank left its key interest rate at 0.25% today, as expected by all 20 economists in a Bloomberg News survey. The currency appreciated versus all major counterparts except the yen.

'Diving Into the Havens'

"The markets are in a panic and everyone's diving into the havens," said Joseph Capurso, a currency strategist at Commonwealth Bank of Australia in Sydney. "When you're seeing this amount of volatility, that's usually bad for so-called risk currencies like the Aussie and the kiwi."

Australia's dollar declined 1.1% to 77.46 yen, and was little changed at 98.38 U.S. cents. New Zealand's dollar dropped 1% to 72.11 U.S. cents.

IntercontinentalExchange Inc.'s Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners including the euro, yen and pound, fell as much as 1.1% to 75.848 in the biggest intraday decline since Jan. 13.

Asian currencies slipped as the South Korean won dropped the most since Dec. 30 as concern mounted that Japan's nuclear crisis would hobble the global economic recovery. The Philippine peso touched 44.01, the weakest level since Feb. 2, on speculation that political tensions in the Middle East would spur an exodus of Filipino workers, hurting remittances.

Workers Respond

More than 300 workers are racing to prevent a meltdown and spread of radiation from the crippled Fukushima Dai-Ichi power station north of Tokyo, an increase from a core group of 50 engineers yesterday, Tokyo Electric Power Co. said. The nation's most powerful earthquake on record triggered a tsunami that killed thousands and damaged the reactors' cooling systems.

"The strength of the yen in the near term will depend heavily on the ongoing developments in the nuclear power plant," said Lee Hardman, a foreign-exchange strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. "If that situation were to escalate, then there's a risk the yen could re-test the levels we saw overnight. The counter to that would be the risk of intervention by central banks has significantly heightened."

The Japanese currency strengthened yesterday after the head of the U.S. Nuclear Regulatory Commission said that the Fukushima Dai-Ichi power plant is releasing "extremely high" levels of radiation that could be life-threatening.

Volatile Trading

The Bank of Japan sold 2 trillion yen ($25 billion) in September to slow the currency's appreciation, its first such action since 2004. The central bank added 6 trillion yen to the financial system in a one-day operation today, bringing total emergency injections this week to 34 trillion yen.

The yen, which has gained 5.4% since the March 11 earthquake, has been supported by speculation that local insurers and investors are redeeming overseas assets to pay for damages and reconstruction.

"The Japanese have to repatriate yen and the repatriation will continue as the crisis deepens," said Kurt Magnus, executive director of currency sales at Nomura Holdings Inc. in Sydney. "My target is 72 on dollar-yen because of the technical breach of the 1995 low. There is no support because we've never been down here before."

Previous High

The yen's surge earlier helped it surpass the previous high of 79.75, reached in April 1995 in the wake of an earthquake that devastated the city of Kobe.

The dollar remained low after consumer prices in the U.S. increased 0.5%, the most since June 2009, figures from the Labor Department showed today in Washington. Excluding volatile food and fuel costs, the so-called core gauge rose 0.2% for a second month, also more than estimated.

Applications for jobless benefits decreased 16,000 in the period ended March 12 to 385,000, in line with the median forecast in a Bloomberg News survey, Labor Department figures showed today. The four-week average of claims dropped to the lowest level since July 2008.