The New Zealand dollar plunged after the yen soared to a record high against the greenback.
Shortly after 10am the NZ dollar fell from around US72.80c to around US71.25c within an hour, according to Reuters data.
ANZ economist Sharon Zollner said the low level of the US dollar against the yen had
meant a large number of stop loss buyers of the yen had needed to get out of short yen positions against everything, including the NZ dollar.
Reuters reported the US dollar fell more than 4 percent against the Japanese currency to as low as 76.25 yen on trading platform EBS, breaching the previous record low of 79.75 set in 1995.
Brian Dolan, chief strategist at Forex.com in Bedminster, New Jersey, noted that France was working to organise a conference call among the Group of Seven wealthiest nations to discuss the economic impact of Japan's crisis. He cited the potential for coordinated intervention ``because this is a significant catastrophe''.
``The G7 will come together to support financial stability in Japan. The last thing it needs is a financial meltdown,'' Mr Dolan said.
Japan's nuclear crisis may have taken its most dangerous turn yet, with a US official saying one of the pools containing highly radioactive spent fuel rods at the stricken plant had run dry.
The kiwi dropped to a 22-1/2-month low against the Japanese currency around 55 yen about 11am from around 58 yen about 10am.
