|Malaysian ringgit's strengthen reaches an eight-year high against the US dollar (AFP Photo)|
The dollar sank to as low as 111.62 yen in early Tokyo trade, levels last seen in September 22, 2005.
In late morning deals here it had recovered to 112.10 yen, down from 112.46 late Friday in New York.
The euro edged up to 1.2742 dollars from 1.2726 in New York on Friday, when it hit 1.2765 dollars, the highest level since May 12, 2005.
The single European currency fell to 142.84 yen after 143.13.
Japanese financial markets were closed on Wednesday through Friday for national holidays.
US job creation weakened last month to its slowest pace since after Hurricane Katrina last year but wages took off in a warning sign for the Federal Reserve, dealers said.
US employers added 138,000 new jobs in April, the slowest pace since October and much less than Wall Street's forecast of 200,000.
Dealers were now waiting for the US Federal Open Market Committee's (FOMC) meeting Wednesday.
With an increase in the key interest rate to 5.00 percent seen as a done deal, the focus is on the post-meeting statement for any hints on whether the Fed will pause in its two-year monetary-tightening cycle.
"There are still some expectations that the Fed will raise its interest rates to 5.25 percent but the statement is likely to be dovish," said Mamoru Ashimoto, a deputy general manager at Shinsei Bank.
He said reported comments from US Treasury Undersecretary Timothy Adams that governments should refrain from intervening in currency markets also fueled the yen's strength.
Japan has intervened on numerous occasions in the past to keep the yen down against the dollar and help exporters stay competitive but its monetary authorities have not intervened since mid-March 2004.
National Australia Bank analysts said in a market note that there was a risk that the US central bank will not pause after its meeting this week in its series of increases in interest rates.
"So any greenback-friendly news could trigger a sharp rally," they added.
On the other hand, "a dovish FOMC statement, followed up by a record US trade deficit for March, due on Friday, could trigger a slide in the US dollar," they added.