Japan’s yen plunged on Monday, setting off a dramatic drop in its value.

    The yen’s plunge has triggered a run on the country’s financial markets, which are currently the second-largest after the U.S. dollar.

    The Nikkei 225, which measures the broadest gauge of the countrys benchmark 10-year bond yield, was down nearly 2 percent, or 0.4 percentage points, at 112.35 yen per dollar.

    In a sign that investors are turning away from Japan, the Nikkeis last day was down 3.3 percent, its weakest one-day percentage in six years.

    The benchmark 10yr Japanese government bond yield was up 3.5 basis points to 1.86 percent.

    Investors, however, were holding off on selling and instead were buying equities.

    “The market is going through a severe liquidity crunch,” said Takashi Hoshino, senior currency strategist at Daiwa Securities Ltd.

    in Tokyo.

    “This is just a symptom of a systemic risk that will persist in the long term.”

    The Japanese central bank has warned that the country may need to cut its benchmark rate to 0.5 percent, the country s largest.

    The central bank will also hold off on buying government debt and is holding its benchmark rates steady for now.

    That is likely to make it difficult for the government to borrow money to support its finances, and could push it deeper into recession.

    The currency also fell against the U and the U-S.

    Dollar, the world’s two most important currencies.

    The dollar fell to 74.35 Japanese yen from 75.10 yen, its lowest level since September and its lowest in more than six months.

    The euro, which has fallen against the yen, slid to $1.2375 from $1,2373.75.

    The Australian dollar also lost to 78.20 Australian cents from 78.33 Australian cents.

    The U.K. pound fell to $2.3542 from $2,370.

    The Japanese yen weakened 0.7 percent to 113.80 yen.

    The Bank of Japan is due to meet later this week to discuss the fallout from the currency slump and what action the central bank can take.

    “In the coming days, we may see the bank begin to raise rates,” said Shigeru Tanaka, chief economist at Mitsubishi UFJ Securities Co. in Japan.

    “But the next few weeks will tell if that rate hike will be credible and if it will be a shock or not.”

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