In response, the yen fell against the greenback to its weakest levels since 2009 at 98.8, off a session low of 97.8.
Analysts are concerned that the recent yen weakness may spark fresh talk of a currency war after angry comments by Korean and Chinese authorities over Japan's export advantage.
"Japanese policymakers are unlikely to give up the pleasures of booming equity markets, political popularity and the concrete hope of economic rebound because neighbors are complaining," said Steven Englander, global head of G-10 forex strategy at Citi in a note.
China Bird Flu Fears
Shanghai-listed stocks reacted to bid flu fears as markets resumed trade after a two-day break. The aviation sector was the worst hit with Air China losing 3 percent and Shanghai International Airport skidding over 4 percent.
The Shanghai Composite and Hang Seng Index earlier touched a fresh year low for 2013 at 2,180 and 21,612 respectively.
"It (bird flu) could be proved a short-lived risk, but for the near term, this incident may affect insurance, airlines, consumer staples, and retailing sectors negatively while healthcare and autos sectors could be potential gainers," wrote analysts of Citi Equity Research in a note.
Meanwhile, airline stocks in Hong Kong rebounded after Friday's sharp sell-off with Cathay Pacific rising over 4 percent.
A sell-off in property shares also weighed on the index after Beijing increased down payments for second homes to 70 percent from the previous 60 percent. Poly Real Estate slipped over 2 percent.