The yen soared in Asia on Friday as US President Barack Obama's announcement that he had authorised US air strikes on Iraq pushed traders into the Japanese currency.
The dollar dropped to as low as 101.58 yen before recovering to 101.81 yen, but it was still well down from 102.09 yen in New York late Thursday as geopolitical tensions weighed on the unit.
The euro was also lower against the Japanese currency at 136.04 yen from 136.42 yen, while it bought $1.3360 against $1.3363.
Investors tend to buy the yen in times of uncertainty and turmoil.
The unit's sharp rise came after Obama said he had authorised the air strikes on Iraq and humanitarian supply drops to prevent a "genocide" by Islamist extremists against minorities.
But Obama, who was an outspoken critic of his predecessor George W. Bush's 2003 invasion of Iraq, said he was not sending back ground forces.
"The currency of choice amidst the turmoil was the safe haven yen," said Chris Tedder, research analyst at Forex.com in Sydney.
Markets largely ignored the Bank of Japan's decision on Friday to hold off expanding its vast stimulus programme following a two-day policy meeting, despite warning that the country's export and factory output picture was weakening.
The decision was widely expected and investors swiftly turned their focus to a regular post-meeting press briefing from BoJ governor Haruhiko Kuroda.
Investors were also keeping an eye on the Ukraine crisis.
On Thursday, NATO chief Anders Fogh Rasmussen urged Russia to "step back from the brink" during a visit to Kiev and vowed support for Ukraine as fears mounted that Moscow was preparing to send troops into the conflict-torn east of the country.
His comments came as Russia retaliated against tough new Western sanctions, banning most food imports from the United States and the European Union and threatening to block flights over its airspace.
The tit-for-tat moves further heighten tensions between Russia and the West over the conflict in Ukraine.
The dollar was stronger against most other Asia-Pacific currencies.