The yen has come under severe upward pressure, prompting Japanese monetary authorities to step in to keep it from rising further.
The key factors behind the dollar decline have been worries about the growing U.S. current-account deficit, heightened Mideast tensions and fears of new terrorist attacks targeting the U.S.
Last week's government report that the Japanese economy has bottomed out has prompted foreign investors to increase Japan's weighting in their equity holdings, adding to the downward pressure on the dollar.
Having waited in vain for the dollar's rebound to around 130 yen, Japanese export-oriented companies have unloaded their dollar holdings.
Alerted by a reported increase in Japan's current-account surplus, Japanese exporters were busy concluding their long-delayed forward deals to sell dollars for yen.
When actual demand for the yen remains strong, few market participants will hurt from monetary authorities' intervention in the currency market.
In other words, when few dealers have increased speculative purchases, monetary authorities cannot expect their intervention to have a sustained impact on the market.
Still, an unchecked yen rise appears unlikely.
The lower half of the 120 yen level would be the dollar's near-term range.