The dollar has risen in value against the yen and the euro following intervention by the world's three biggest central banks in the currency markets.

One dollar bought 120.36 yen following the intervention, compared with 118.36 yen before the action.

Dollar rates

Euro: 0.9917 Pound: 1.5331 Yen: 119.46 Data: 2200 GMT

One euro bought $0.987, having previously been as high as $0.999.

However, the dollar fell back in later trade, with some analysts doubting commitment of the US central bank, the Federal Reserve, to the move.

"I don't think the market is going to get any impression that the Fed wants the dollar higher," said Rom Simpson at S&P MMS.

Recovery hopes

The intervention was undertaken at the instigation of Japanese authorities who wanted the yen to weaken to increase the chance of economic recovery.

Central banks rarely intervene in a co-ordinated fashion in currency markets, preferring to let traders and investors decide the true value of a currency.

Japanese authorities have intervened in the markets before, in an effort to weaken the strengthening yen, amid fears that the weaker yen could hurt Japan's chances of recovery.

However, the general weakness of the dollar meant that their intervention had little impact.

"We are intervening in the market," senior Japanese finance ministry official Haruhiko Kuroda confirmed.

"The ECB and the Fed are operating on behalf of the BOJ as well."

"We will continue to monitor currency markets carefully and take appropriate action as needed," he added.

US approval?

While the European Central Bank (ECB) confirmed the report, the Federal Reserve declined to comment.

The US Treasury Secretary, Paul O'Neill, is generally believed to think it would be impossible to try to stabilise the currency markets.

Marc Chandler, chief currency strategist at HSBC, doubts that US co-operation implies approval of the intervention.

"It is proper protocol, because you ask the central bank in an overseas market to act on your behalf," Marc Chandler said.

Dollar boost?

In the last few weeks, the value of the dollar has weakened substantially on international currency markets, by around 10% against the euro, nearly reaching parity of one euro to one dollar.

International investors have become increasingly wary of buying the dollar, following the recent string of accounting scandals and continued stock market turbulence.

They have chosen instead to put their money into Asia or Europe.

However, there have been concerns that a weak dollar could not only hinder the fragile Japanese recovery, but might also exacerbate the crises in South American countries, such as Brazil.

Financier George Soros has told the BBC that without intervention to prop up the dollar, it could fall by around one third, causing chaos on world currency markets.