The Australian currency managed to finish almost one US cent higher even after a steady fall throughout the trading day as the Bank of Japan took measures to bolster liquidity in an emergency meeting.

The local unit had edged up 1.5 US cents from Friday's local close following the US Federal Reserve's announcement it was stood ready to act if needed to spur slowing growth.

At the local close, the Aussie was exchanging at $US0.8980, below the day's high of $US0.9031 but still higher from Friday's finish of $US0.0.8870.

The domestic currency went below $US0.90 by mid afternoon, according to Nomura Australia chief economist Stephen Roberts.

''It had quite a strong start to the session,''

''But it started to give it away on talk the bank of Japan would move fairly aggressively to prop up liquidity in the system,'' he said.

Japan's central bank during an emergency board meeting called by Bank of Japan governor Masaaki Shirakawa today decided to ease monetary policy amid a strong yen and heightening political pressure to take action on the wavering economic recovery.

For increased liquidity, the central bank will increase a low-interest loan program for financial institutions from 20 trillion yen to 30 trillion yen. It moved to leave its key interest rate unchanged at 0.1 per cent after the meeting.

The news contributed to the late decline in the Aussie, said Mr Roberts.