"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.