Japan's currency strengthened to the 155-yen level against the dollar, the highest in about six weeks. The gain came amid speculation the Bank of Japan will raise interest rates.

Digital Transformation Minister Kono Taro said in an interview with US media on Tuesday that he has called on the bank to raise rates to help boost the value of the yen.

In tandem, remarks by Federal Reserve officials this week added to speculation the US central bank is preparing to cut rates, which led to selling of the dollar.

Republican nominee for President Donald Trump has also expressed concern about the strength of the US currency.

The yen's gain helped drive Japanese stocks lower, with the Nikkei 225 benchmark index losing more than 900 points, or 2 percent, at one point on Thursday.

Shares of auto and high tech-related stocks were sold.

Semiconductor-related stocks faced a sell-off on reports the US will crack down on chip exports to China.