Driven by fears that its soaring yen may thwart its economic recovery following a destructive earthquake and tsunami in March, the Japanese government has played a hand in the currency market on August 4.

Jun Azumi, minister for Japanese Ministry of Finance told Reuters reporters that on August 4, the government spent a record high of 4.5129 trillion yen, resulting in an August foreign reserves value of $1.22 trillion, a 0.07 trillion difference from July's $ 1.15 trillion foreign reserves.

The huge expenditure also provided a brief lift to dollar as it traded above 80 yen. But after two weeks, the U.S. dollar went down to 75.941 per yen.

Azumi was quoted on the report that the amount spent was the biggest expenditure of the government in the currency market compared to 2.125 trillion spent on Sep 15, 2010. On Wednesday, the U.S. dollar traded with yen at 77.50 after the Swiss National Bank put an exchange rate cap on its skyrocketing franc, a move that shocked the whole markets.

Reports said the move by Swiss National Bank may compel Japan to stage another currency market intervention to abate its yen if authorities can determine more safe-haven inflows into its currency.

The finance minister told reporters that he is ready to convince the financial leaders during the Group of Seven meeting later this week that the rising yen is not good for Japan and the world economy.

He hinted that despite the possibility of not gaining favor from G7 for the intervention, he remains fearless to give a hand in the currency market to counter speculations, which have been influencing the ascending value of yen since the March disaster.

An AP report quoted Michiyosi Kato, senior vice-president for forex sales at Mizuho Corporate Bank, saying the government will hold on to its plan of intervention in the future if necessary, especially that the yen's rise has not only been rapid, but also driven by speculative moves after the disaster.

When asked for a possible response from G7 financial leaders on its plan, Mizuho quickly quipped to Reuters that although Japan may struggle for their support, they are likely to keep quiet if the Japanese government conducts a solo intervention.