The dollar fell almost 7 percent against the yen and 6 percent against the deutsche mark in the first four weeks after the US drove Iraqi forces out of Kuwait in January 1991.
Gains in Japan's currency may be limited by expectations the government will sell yen to stem its currency's rally and help bolster exports. A report showing industrial production fell in November for a third month, indicating an economic recovery is faltering, may also push the yen lower.
Finance Minister Masajuro Shiokawa said Japan would "have to take action if the yen gets stronger," echoing earlier comments by his deputy, Haruhiko Kuroda.
The Bank of Japan may sell the currency if it strengthens to ?119 or ?118 to the dollar, said Monica Fan, a senior currency strategist at RBC Capital Markets in London.
Currency sales by the Bank of Japan would add to the ?4 trillion it sold over seven days in May and June, a record for one quarter.
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