The yen took a battering in Tokyo interbank trading Friday amid concerns over the nation's ailing economy.

After the dollar climbed past the 135 yen level briefly in the afternoon for the first time in 6 1/2 years, there were indications that the Bank of Japan had stepped in to keep the yen from falling further, dealers said.

The yen was changing hands at 134.55-58 to the dollar at 5 p.m., compared with 133.86-88 late Thursday. The yen came under fresh selling pressure on reports that the U.S. rating agency Moody's Investors Service had lowered its outlook on the Japanese government's debt obligations.

Moody's changed its outlook on Japanese ratings from "stable" to "negative," expressing doubt about the ability of Japanese authorities to pull the economy out of a seven-year downturn and put it on a path of sustainable recovery. Moody's action also sent the Tokyo stock and bond markets reeling.

The stock market opened higher Friday after suffering its biggest loss of the year on Thursday, but the uptrend soon fizzled after the Moody's report filtered into the futures market late in the morning. he benchmark 225-issue Nikkei average, a 538.76-point loser the previous day, lost another 185.12 points to end the day at 15,517.78, its lowest level since mid-January.

Government bond prices also tumbled, driving up the yield on the benchmark 10-year bond to 1.68 percent, its highest since Feb. 19.