The U.S. dollar hit its lowest mark against the Japanese yen since 1995 on Thursday, fetching 86.72-75 yen in early afternoon trading, causing the Japanese government very concern.

Chief Cabinet Secretary Hirofumi Hirano said,"if the yen rises at an accelerated pace, there is no doubt it will have an impact."

Meanwhile, Finance Minister Hirohisa Fujii refused to tell reporters whether the government would take action after the dollar's drop in trading on Thursday. He said that currently, the government is looking into whether the current exchange rate was "abnormal, and would take measures in cooperation with the Group of Twenty and Group of Seven nations if it turned out to be so.

Earlier Thursday, Senior Vice Finance Minister Yoshihiko Noda, has ruled out buying dollars to slow the rise of the yen, saying" we are not thinking about intervention at the moment."

The fall of the dollar has been blamed on speculation that the Federal Reserve will keep rates low as it attempts to keep a tentative economic recovery on track. The dollar has also fell against a range of currencies in recent days, including the euro, the Thai baht, Swiss franc and the Philippine Peso.

The dollar has declined in value against other currencies dramatically since the credit crisis started last summer, pushing prices for imported goods up in the United States, and leading to a decline in exports for Japan.

On Wednesday, data showed exports from Japan to the United States had fallen by 27.6 percent in October.