The yen surged Wednesday to its highest level against the dollar in nearly 16 years, as Japans continuing nuclear crisis prompted more yen demand by Japanese firms sending money back home.

The greenback fell as low as 79.97 yen, its lowest level since April 1995 and within view of its record low around 79.75 yen reached in the months after Japans Kobe earthquake in the same year, before it rebounded slightly amid the possibility of Japanese official intervention.

Traders feared that Japan might be in danger of losing its battle to contain a nuclear meltdown, which is undermining risk appetite ...