The yen slid on Wednesday after Japanese share prices plummeted and sparked worries foreign investors may pull their funds out of Japanese stocks. Tokyo's Nikkei share average fell nearly 5 percent at one stage, after prosecutors raided the offices of high-profile Japanese Web portal operator Livedoor Co. earlier in the week on suspicion of securities law violations. "I don't think the fall in stock prices indicates a change in the Japanese economic recovery. But the forex market is trying to discern how much Japanese share prices are bloated," said Masayuki Kichikawa, senior economist at Mizuho Securities. Many traders see the fall in Japanese stock prices as a natural adjustment after gains of around 40 percent last year, and they don't expect the selloff to derail the economy. But some traders feared a big fall in the bourse could further sour sentiment among foreign investors, who have helped to push the Nikkei to five-year highs, dealers said. "If the Livedoor effect pushes the Nikkei down significantly, this could prompt foreign investors to sell the yen," said a trader at a Japanese bank. The dollar rose as high as around 115.90 yen from around 115.50 yen in late U.S. trade. By 0600 GMT, it had stepped back to around 115.60 yen, partly because share prices had recovered some of the sharp losses. The Nikkei ended trade down 2.94 percent after falling nearly 3 percent on Tuesday. Some traders said the yen was resilient because foreign investors who had bought Japanese shares in recent months had hedged against the yen. "The Nikkei's rally late last year did not lead to a rise in the yen. So its fall won't necessarily prompt the yen's fall either," said Kichikawa of Mizuho Securities.